Morning Notes – Monday, May 15, 2023

Directional Bias For The Day:

• S&P Futures are higher at 9:00 AM. Futures have been declining since 7:30 AM – down more than ten points.
• The odds are for a sideways to a down day from the pre-open level around 4146.00 with elevated volatility – watch for a break above 4155.25 for a change in sentiments
• The major economic data reports due during the day:
  • Empire State Manufacturing Index ( -31.8 vs. -3.7 est.; prev. 10.8) at 8:30 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4111.65, 409994, and 4084.73
• Critical resistance levels for S&P 500 are 4143.74, 4154.28, and 4164.10
• The key levels for E-mini futures are 4155.25, the high at 7:30 AM, and 4138.50, the high at 4:00 PM

Pre-Open

• On Friday at 4:00 PM, S&P futures (June 2023) closed at 4138.00, and the index closed at 4124.08 – a spread of about +14.00 points; the futures closed at 4138.00; the fair value is +0.0
• Pre-NYSE session open, futures were higher – at 9:00 AM, S&P 500 futures were up by +6.75, Dow by +35, and NASDAQ by +24.25

Markets Around The World

• Markets in the East closed higher
• European markets are mixed – the UK, Switzerland, and STOXX 600 are up; Germany, France, Italy, and Spain are down
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower
  • Precious metals are mixed
  • Industrial metals are mostly lower
  • Soft commodities are mostly lower
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.485, up +3.3 basis points from two weeks ago;
  • The 30-year is at 3.820%, up 14.2 basis points;
  • The 2-year yield is at 3.995%, down -1.1 basis points;
  • The 10-Year-&-2-Year spread is at -0.510, up from -0.554
  • The 30-Year-&-10-Year spread is at 0.335, up from +0.226
• VIX
  • At 17.38 @ 8:15 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-On-Neutral

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

Previous Session

Major U.S. indices closed lower on Friday, May 12, in mixed volume. S&P 500 and NASDAQ Composite traded in higher volume.

The major indices opened higher, and most made the day’s highs in the initial trading. The indices then declined until the afternoon and recovered some of the lost ground near the close of trading.

For the week, the major US indices mostly declined in lower volume. NASDAQ Composite was the only major index to buck the trend. It is also leading the market. The dollar index closed higher. The energy futures were mixed, the precious metals were down, the industrial metals were mostly down, and so too were the most of the soft commodities. The US Treasury yields closed higher.

From Briefing.com:

[…] The Vanguard Mega Cap Growth ETF (MGK) fell 0.3% while the Invesco S&P 500 Equal Weight ETF (RSP) closed flat and the market-cap weighted S&P 500 fell 0.2%. […] Decliners had only a slim lead over advancers at both the NYSE and the Nasdaq. […] The 2-yr note yield, at 3.91% shortly before the release, settled up seven basis points to 3.98%. The 10-yr note yield, at 3.38% shortly before the release, settled the session up seven basis points to 3.46%. Nasdaq Composite: +17.4% YTD S&P 500: +7.4% YTD Dow Jones Industrial Average: +0.5% YTD S&P Midcap 400: +0.1% YTD Russell 2000: -1.2% YTD […] April Import Prices 0.4%; Prior was revised to -0.8% from -0.6% April Import Prices ex-oil 0.0%; Prior -0.5% April Export Prices 0.2%; Prior was revised to -0.6% from -0.3% April Export Prices ex-ag. 0.2%; Prior was revised to -0.5% from -0.2% […] May Univ. of Michigan Consumer Sentiment – Prelim 57.7 (Briefing.com consensus 62.9); Prior 63.5 […]