Market Remarks

Morning Notes – Monday, June 5, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM. Futures have been moving sideways to up since 3:15 AM.
  • The odds are for a sideways to an up day – watch for a break above 4297.75 or a break below 4281.75 for clarity
  • The major economic data reports due during the day:
    • Final Services PMI ( 551. est.; prev. 551.) at 9:45 AM
    • ISM Services PMI ( 52.6 est.; prev. 51.9) at 10:00 AM
    • Factor Orders ( 0.8% est.; prev. 0.9%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4278.59, 4270.95, and 4251.09
  • Critical resistance levels for S&P 500 are 4290.67, 4302.18, and 4312.23
  • The key levels for E-mini futures are 4297.75, the high at 3:00 PM on Friday, and 4281.75, the low at 12:45 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2023) closed at 4289.25, and the index closed at 4282.37 – a spread of about +6.75 points; the futures closed at 4288.00; the fair value is +1.25
  • Pre-NYSE session open, futures were mixed – at 9:00 AM, S&P 500 futures were up by +2.75, Dow down by -19, and NASDAQ down by -13.00

Markets Around The World

  • Markets in the East closed higher
  • European markets are mostly higher – France and Itlay are down
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • EUR/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.691, down -0.1 basis points from two weeks ago;
    • The 30-year is at 3.882%, down -6.6 basis points;
    • The 2-year yield is at 4.512%, up +24.4 basis points;
    • The 10-Year-&-2-Year spread is at -0.821, down from -0.576
    • The 30-Year-&-10-Year spread is at 0.191, down from +0.256
  • VIX
    • At 15.11 @ 8:45 AM; up from the last close; below the 5-day SMA;
    • Recent high = 20.81 on May 24; low = 14.42 on June 2
    • Sentiment: Risk-Neutral-On

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

Weekly:
  • The week ending on June 2 as a green candle with almost no upper shadow and a lower shadow almost equal to the real body, moving above the upper bound of a symmetrical triangle
    • Stochastic (9,1, 3): %K is above the %D; above 95
    • RSI-9 is just above 70
  • The week was up +76.92 or +1.8%; the 5-week ATR  is 106.09
  • An up week, third in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=4246.40, R1=4326.64, R2=4370.92; S1=4202.12, S2=4121.88; R1/R2 pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A green candle that gapped up with no lower shadow and a small upper shadow; closed at the higher level since August 19, 2022
    • Stochastic (9, 1, 3): %K is above the %D; near 100
    • RSI-9 is above 70; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 4174.00 at 10:00 AM on May 31. Broke above a Horizontal Channel between 4205.00 and 4060.00  – the 61.8% extension target is near 4295.00 and the 100% extension target is ear 4350.00
    • RSI-21 has been declining since 2:00 PM on Friday
    • Above  EMA10 of EMA50, which is above EMA20
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to up since 8:00 PM on Sunday
    • RSI-21 has been moving around 65
    • Above EMA 20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 3:45 PM on Friday.
  • The Bollinger Band is narrow and stable
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, June 2, in higher volume. The major indices gapped up at the open and then traded higher for the rest of the day. Most are trading up from the recent congestion area.

For the week, the major US indices closed higher in mostly lower volume. The markets in Asia and Europe also mostly closed higher. The dollar index closed down, energy futures closed down, precious metals closed up, the industrial metals were mixed, and the soft commodities closed mixed. The 10-year and 30-year Treasury yields closed down but the 2-year yields were up. All S&P sectors closed up for the week.

From Briefing.com:

The stock market closed out this holiday-shortened week on a strong note.

[…]

Mega cap stocks had a decent showing, but the rest of the market had an even better performance. The Vanguard Mega Cap Growth ETF (MGK) rose 1.0% while the Invesco S&P 500 Equal Weight ETF (RSP) rose 2.2%. The market-cap weighted S&P 500, which flirted with 4,100 last week, reached 4,290 at its high of the day and closed with a 1.5% gain.

All the major indices closed with sizable gains near their best levels of the session. 29 of the 30 Dow Jones Industrial Average components closed with a gain and all 11 S&P 500 sectors settled higher also.

[…]
  • Nonfarm payrolls rose by 339,000 in May (Briefing.com consensus 190,000) from a revised increase of 294,000 in April (from 253,000)
  • Nonfarm private payrolls rose by 283,000 (Briefing.com consensus 177,000) from a revised 253,000 in April (from 230,000)
  • Average hourly earnings rose by 0.3% in May (Briefing.com consensus 0.3%) following a revised 0.4% incline in April (from 0.5%)
  • The unemployment rate rose to 3.7% (Briefing.com consensus 3.5%) from 3.4% in April
  • The average workweek fell to 34.3 hours (Briefing.com consensus 34.4) from 34.4 hours
[…]
INDEX STARTED WEEK ENDED WEEK CHANGE % CHANGE YTD %
DJIA 33093.30 33762.70 669.40 2.0 1.9
Nasdaq 12975.60 13240.70 265.10 2.0 26.5
S&P 500 4205.45 4282.37 76.92 1.8 11.5
Russell 2000 1773.02 1830.91 57.89 3.3 4.0
Exit mobile version