Morning Notes – Wednesday, April 26, 2023

Sunil Sharma

2 years ago

Directional Bias For The Day:

S&P Futures are higher at 8:30 AM – bouncing off from a Double Bottom at around 4090.00
The odds are for a sideways to a down day – watch for a break above 4116.25 and a break below 4189.50 for clarity.
The major economic data reports due during the day:
- Core Durable Goods Orders ( 0.3% vs. -0.2% est.; prev. -0.1%) at 8:30 AM
- Durable Goods Orders ( 3.2% vs. 0.7% est.; prev. -1.2%) at 8:30 AM
- Goods Trade Balance ( -84.6B vs. -90.1B est.; prev. -91.6B) at 8:30 AM
- Prelim Wholesale Inventories ( 0.1% vs. 0.1% est.; prev. 0.1%) at 8:30 AM

Directional Bias Before Open:

Weekly: Uptrend Resumed
Daily: Uptrend Under Pressure
120-Min: Side-Down

30-Min: Down-Side
15-Min: Side-Down
6-Min: Down

Key Levels:

Critical support levels for S&P 500 are 4069.84, 4056.18, and 4032.10
Critical resistance levels for S&P 500 are 4100.26, 4115.12, and 4126.43
The key levels for E-mini futures are a break above 4116.25, the high at 6:00 PM on Tuesday, and a break below 4089.50, the low at 7:00 AM

Pre-Open

On Tuesday at 4:00 PM, S&P futures (June 2023) closed at 4093.50, and the index closed at 4071.63 – a spread of about +22.00 points; the futures closed at 4093.25; the fair value is +0.25
Pre-NYSE session open, futures were higher – at 8:45 AM, S&P 500 futures were up by +5.0, Dow by +40, and NASDAQ by +102.50

Markets Around The World

Markets in the East closed mostly lower – Hong Kong and Mumbai were up
European markets are lower
Currencies (Compared to two weeks ago):

Up	Down
EUR/USD USD/JPY USD/CAD	Dollar index GBP/USD USD/CHF AUD/USD NZD/USD INR/USD

Commodities (Compared to two weeks ago):
- Energy futures are mixed
- Precious metals are lower
- Industrial metals are mostly higher
- Soft commodities are mostly lower
Treasuries (Compared to two weeks ago)
- The 10-year yield closed at 3.396, down -3.8 basis points from two weeks ago;
- The 30-year is at 3.651%, up +3.0 basis points;
- The 2-year yield is at 3.902%, down -12.2 basis points;
- The 10-Year-&-2-Year spread is at -0.506, up from -0.590
- The 30-Year-&-10-Year spread is at 0.255, up from +0.187
VIX
- At 19.38 @ 7:30 AM; up from the last close; above the 5-day SMA;
- Recent high = 25.21 on March 24; low = 16.17 on April 19
- Sentiment: Risk-Off

The trend and patterns in various time frames for S&P 500:

Weekly:	The week ending on April 21 was a small Doji candle following another Doji candle. Stochastic (9,1, 3): %K is above the %D; RSI-9 is just above 60 The week was down -4.12 or -0.1%; the 5-week ATR is 99.82 A down week, second in the last five weeks, and fifth in the previous ten weeks; The weekly pivot point=4138.95, R1=4164.05, R2=4194.57; S1=4108.43, S2=4083.33; No pivot levels were breached Above 10-week EMA and 39-week SMA; below 89-week SMA Uptrend
*Daily*	A relatively large red candle that gapped down after a few small Doji candles Stochastic (9, 1, 3): %K is below the %D, near zero RSI-9 dropped to just above 40; below 8-DMA Below 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA; Uptrend Under Pressure
*2-Hour (E-mini futures)*	Moving sideways to down after breaking below an up-sloping flag, which had been in effect since 2:00 PM on March 9, at 2:00 PM on April 19. Broke a sequence of higher highs and higher lows since March 13 RSI-21 bounced up from below 15 at 2:00 PM on Tuesday to near 30; potential for a Bullish Divergence Below EMA20, which is below EMA10 of EMA50 Bias: Side-Down
*30-Minute (E-mini futures)*	Trending down since 8:30 AM on April 18, making lower highs and lower lows, breaking below a Double Bottom pattern – a convincing break below 4091.50 will have the 61.8% extension target near 4075.00 and the 100% extension target near 4065.00 RSI-21 is around 35 Below EMA 20, which is below EMA10 of EMA50 Bias: Down-Side
*15-Minute (E-mini futures)*	The Bollinger Band (20, 2.0) has been moving down since 3:15 AM. The Bollinger Band has been expanding, with the price walking down the lower band. Bias: Side-Down

Previous Session

Major U.S. indices closed lower on Tuesday, April 25, in higher volume.

The major indices opened down and traded down for the rest of the day with negligible bounces backs.

From Briefing.com:

[…]
The major indices all registered decent losses despite roughly 75% of companies reporting quarterly results since yesterday’s close topping earnings expectations.
[…]
The S&P 500 closed below the 4,100 level today, finishing at its lows for the session, with all 11 sectors in the red. The defensive-oriented utilities (-0.1%) and consumer staples (-0.1%) sectors led the pack while some cyclical sectors — materials (-2.2%), consumer discretionary (-2.1%), and energy (-1.8%) — were among the worst performers. The information technology sector (-2.1%) was another top laggard today.
[…]
The 2-yr note yield fell 18 basis points to 3.95% and the 10-yr note yield fell 12 basis points to 3.40%.

Nasdaq Composite: +12.7% YTD

S&P 500: +6.1% YTD

Dow Jones Industrial Average: +1.2% YTD

S&P Midcap 400: +0.9% YTD

Russell 2000: -0.9% YTD

[…]

The FHFA Housing Price Index rose 0.5% in February from a revised 0.1% in January (from 0.2%)

The S&P Case-Shiller Home Price Index fell to 0.4% in February (Briefing.com consensus 0.0%) from a revised 2.6% in January (from 2.5%)

New home sales increased 9.6% month-over-month in March to a seasonally adjusted annual rate of 683,000 units (Briefing.com consensus 630,000) from a downwardly revised 623,000 (from 640,000) in February. On a year-over-year basis, new home sales were down 3.4%.

[…]

The Conference Board’s Consumer Confidence Index for April fell to 101.3 (Briefing.com consensus 104.1) from a downwardly revised 104.0 (from 104.2) in March. In the same period a year ago, the index stood at 108.6.

[…]
Overseas:

Europe: DAX +0.1%, FTSE -0.3%, CAC -0.6%

Asia: Nikkei +0.1%, Hang Seng -1.8%, Shanghai -0.3%

Commodities:

Crude Oil -1.64 @ 77.07

Nat Gas +0.03 @ 2.29

Gold +5.30 @ 2005.10

Silver -0.34 @ 24.95

Copper -0.11 @ 3.84