Market Remarks

Morning Notes – Tuesday, May 9, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:45 AM – moving sideways around 4135.00 since 4:30 AM after declining more than 15 points from 1:00 AM
  • The odds are for a down to a sideways day – watch for a break above 4152.75 for a change of sentiments
  • No major economic data reports are due during the day:

Directional Bias Before Open:

  • Weekly: Uptrend Resumed
  • Daily: Uptrend Under Pressure
  • 120-Min: Side
  • 30-Min: Side-Down
  • 15-Min: Down
  • 6-Min:  Down-Side

Key Levels:

  • Critical support levels for S&P 500 are 4123.81, 4112.89, and 4084.73
  • Critical resistance levels for S&P 500 are 4142.30, 4148.30, and 4164.10
  • The key levels for E-mini futures are 4152.75, the high at 1:15 AM and 4134.25, the low at 7:30 PM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2023) closed at 4153.25, and the index closed at 4138.12 – a spread of about +15.00 points; the futures closed at 4152.75; the fair value is +0.50
  • Pre-NYSE session open, futures were lower – at 8:30 AM, S&P 500 futures were down by -13.75, Dow by -103, and NASDAQ by -63.25

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo closed higher
  • European markets are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • EUR/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.492, down -2.3 basis points from two weeks ago;
    • The 30-year is at 3.806%, up 7.8 basis points;
    • The 2-year yield is at 3.995%, down -9.5 basis points;
    • The 10-Year-&-2-Year spread is at -0.503, up from -0.575
    • The 30-Year-&-10-Year spread is at 0.314, up from +0.213
  • VIX
    • At 17.60 @ 8:00 AM; up from the last close; below the 5-day SMA;
    • Recent high = 21.23 on May 4; low = 15.53 on May 1
    • Sentiment: Risk-Neutral-Off

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

Weekly:
  • The week ending on May 5 as a small red candle with almost a long lower shadow and a small upper shadow, breaking above the upper bound of a symmetrical triangle
    • Stochastic (9,1, 3): %K is below the %D;
    • RSI-9 is just below 60
  • The week was down -33.23 or -0.8%; the 5-week ATR  is 93.78
  • A down week, third in the last five weeks, and fourth in the previous ten weeks;
  • The weekly pivot point=4123.82, R1=4199.35, R2=4262.46; S1=4060.71, S2=3985.18; S1 pivot level was breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A small Harami Doji near the close of the previous day’s candle
    • Stochastic (9, 1, 3): %K is above the %D;
    • RSI-9 turned up above 50; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Moving sideways around the middle of a Horizontal channel that has been emerging since March 30 between 4200.00 and 4060.00;
    • RSI-21 has fallen to 40 from above 75 on Monday
    • Below EMA20, but above EMA10 of EMA50
  • Bias:  Side
30-Minute (E-mini futures)
  • Moving sideways to down since 1:30 PM on Friday after rising 90 points from near 4062.00 on Thursday mid-day
    • RSI-21 has drifted to below 40 from 70
    • Below EMA 20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting down since 2:30 AM.
  • The Bollinger Band is contracting a bit since 7:30 AM after expanding from 2:00 AM
  • Bias: Down

Previous Session

Major U.S. indices closed mixed on Monday, May 8, in mostly lower volume. Dow Jones Industrial Average, Russell 2000, and Dow Jones Transportation Average closed lower. Dow Jones Transportation Average traded in higher volume.

The major indices opened flat and then mostly traded sideways with little fluctuations. Most made Doji, Harami, or similar indecisive candles.

From Briefing.com:

[…]

Ultimately, the major indices closed the session near their flat lines, sporting only modest gains or losses.

[…]

Most of the S&P 500 sectors closed in the red with real estate (-0.7%) and industrials (-0.4%) showing the biggest losses. The communication services sector (+1.3%) was the only sector to move more than 1.0%,

[…]

The 2-yr note yield rose eight basis points to 3.99% and the 10-yr note yield rose eight basis points to 3.52%.

  • Nasdaq Composite: +17.1% YTD
  • S&P 500: +7.8% YTD
  • Dow Jones Industrial Average: +1.4% YTD
  • S&P Midcap 400: +1.0% YTD
  • Russell 2000: -0.4% YTD

Economic data today is limited to the Wholesale Inventories report for March (Briefing.com consensus 0.1%; prior 0.1%) at 10:00 a.m. ET.

[…]

Overseas:

  • Europe: DAX -0.1%, FTSE market closed, CAC +0.1%
  • Asia: Nikkei -0.7%, Hang Seng +1.2%, Shanghai +1.8%

Commodities: 

  • Crude Oil +1.71 @ 73.13
  • Nat Gas +0.09 @ 2.42
  • Gold +8.50 @ 2033.10
  • Silver -0.09 @ 25.84
  • Copper +0.03 @ 3.82
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