Market Remarks

Morning Notes – Tuesday, May 23, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM. Futures have been moving down since 10:00 PM – down more than 35 points.
  • The odds are for a down day with elevated volatility- watch for a break above 4205.25 for a change of sentiments.
  • The major economic data reports due during the day:
    • Flash Manufacturing PMI ( 50.0 est.; prev. 50.2) at 9:45 AM
    • Flash Services PMI ( 52.6 est.; prev. 53.6) at 9:45 AM
    • New Home Sales ( 665K est.; prev. 683K) at 10:00 AM
    • Richmond Manufacturing Index ( -8 est.; prev. -10) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4179.68, 4160.04, and 4151.32
  • Critical resistance levels for S&P 500 are 4189.39, 4207.33, and  4212.29
  • The key levels for E-mini futures are 4205.25, the high at 6:30 AM, and 4186.50, the low at 6:00 PM on Sunday

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2023) closed at 4205.75, and the index closed at 4192.63 – a spread of about +13.25 points; the futures closed at 4205.00; the fair value is +0.25
  • Pre-NYSE session open, futures were lower – at 8:30 AM, S&P 500 futures were down by -8.75, Dow by -50, and NASDAQ by -37.75

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and Sydney closed lower; Mumbai, Seoul, and Singapore closed higher
  • European markets are mostly lower – the UK is higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.719, up +19.8 basis points from two weeks ago;
    • The 30-year is at 3.970%, up +13.5 basis points;
    • The 2-year yield is at 4.341%, up +34.6 basis points;
    • The 10-Year-&-2-Year spread is at -0.622, down from -0.474
    • The 30-Year-&-10-Year spread is at 0.251, down from +0.314
  • VIX
    • At 17.64 @ 8:45 AM; up from the last close; above the 5-day SMA;
    • Recent high = 21.23 on May 4; low = 15.53 on May 1
    • Sentiment: Risk-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 Doji candle near the highest level of the year
    • Stochastic (9, 1, 3): %K crossed below the %D;
    • RSI-9 is above 60; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Falling back into a Horizontal Channel between 4205.00 and 4060.00 that has been forming since March 30
    • RSI-21 is below 40
    • Below EMA20, at EMA10 of EMA50
  • Bias:  Side
30-Minute (E-mini futures)
  • Moving sideways to down since 11:30 AM on May 19
    • RSI-21 has drifted down to near 35
    • 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 moving down  since 12:00 AM
  • The Bollinger Band is relatively stable, with the price walking down the lower band
  • Bias: Down

Previous Session

Major U.S. indices closed mostly higher on Monday, May 22, in mostly lower volume. Dow Jones Industrial Average and NYSE COmpsite closed lower. Dow Jones Transportation Average traded in higher volume.

Most major indices made small indecisive candles. The day’s price range was narrow.

From Briefing.com:

[…]

The major indices clung to fairly narrow ranges for the entire session, sporting only modest gains or declines.

[…]

The SPDR S&P Bank ETF (KBE) rose 2.4% and the SPDR S&P Regional Banking ETF (KRE) gained 3.2%.

[…]

The S&P 500 communication services sector (+1.2%) held the top spot among the 11 sectors by a decent margin thanks to gains in Meta Platforms and Alphabet. Real estate (+0.7%) and financials (+0.2%) were also top performers today. The consumer staples sector (-1.5%) closed at the bottom of the pack.

[…]

The 2-yr note yield rose seven basis points to 4.34% and the 10-yr note yield rose two basis points to 3.71%.

  • Nasdaq Composite: +21.5% YTD
  • S&P 500: +9.2% YTD
  • Russell 2000: +1.9% YTD
  • S&P Midcap 400: +1.6% YTD
  • Dow Jones Industrial Average: +0.4% YTD
[…]

Overseas:

  • Europe: DAX -0.3%, FTSE +0.2%, CAC -0.2%
  • Asia: Nikkei +0.9%, Hang Seng +1.2%, Shanghai +0.4%

Commodities: 

  • Crude Oil +0.31 @ 72.07
  • Nat Gas -0.17 @ 2.55
  • Gold -5.50 @ 1976.30
  • Silver -0.23 @ 23.82
  • Copper -0.05 @ 3.68
Exit mobile version