Morning Notes – Thursday, July 13, 2023

/ July 13, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM. Futures have been moving within a range bounded by 4527.00 and 4517.75 since 3:15 AM.
  • The odds are for an up day with a good chance of sidewyas to down move from the pre-open levels around 4525.00 – watch for a break above 4527.00 or a break below 4517.75 for clarity
  • The major economic data reports due during the day:
    • PPI m/m ( 0.1% vs. 0.2% est.; prev. -0.3%) at 8:30 AM
    • Core PPI m/m ( 0.1% vs. 0.2% est.; prev. 0.2%) at 8:30 AM
    • Unemployment Claims ( 237K vs. 251K est.; prev. 249K) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4481.18, 4466.00, and 4463.23
  • Critical resistance levels for S&P 500 are 4489.17, 4512.94, and 4521.16
  • The key levels for E-mini futures are 4527.00, the high at 8:30 AM, and 4517.5, the low at 8:36 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2023) closed at 4509.25, and the index closed at 4472.16 – a spread of about +37.00 points; the futures closed at 4507.50; the fair value is +1.75
  • Pre-NYSE session open, futures were higher – at 9:00 AM, S&P 500 futures were up by +16.50, Dow by +48, and NASDAQ by +101.25

Markets Around The World

  • Markets in the East closed higher
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.830, up +12.0 basis points from two weeks ago;
    • The 30-year is at 3.943%, up +14.0 basis points
    • The 2-year yield is at 4.750%, up +3.4 basis points;
    • The 10-Year-&-2-Year spread is at -0.914, up from -1.006
    • The 30-Year-&-10-Year spread is at 0.107, up from +0.093
  • VIX
    • At 13.46 @ 8:30 AM; down from the last close; below the 5-day SMA;
    • Recent high = 21.33 on May 4; low = 12.73 on June 22
    • Sentiment: Risk-On-Neutral

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

Weekly:
  • The week ending on July 7 was a red candle that declined to near the middle of the previous week’s candle
    • Stochastic (9,1, 3): %K is crisscrossing the %D above 80;
    • RSI-9 has declined to just below 70
  • The week was down -51.43 or -1.2%; the 5-week ATR  is 96.24
  • A down week, second in the last five weeks, and fourth in the previous ten weeks;
  • The weekly pivot point=4413.49, R1=4441.92, R2=4484.90; S1=4370.51, S2=4342.08; No pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A Doji candle with a longer upper shadow than the lower shadow that gapped up. Broke above a recent high of 4458.48, and the next resistance is at the 4520.00 level.

    • Stochastic (9, 1, 3): %K is above the %D;
    • RSI-9 is near 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 2:00 AM on Monday from a support level around 4410.00. Broke above a Symmetrical Triangle – the 61.8% extension target near 4512.00 is achieved; the 100% extension target is near 4545.00, and the 161.8% extension target is near 4590.00
    • RSI-21 declined from 90 below 70 and is at around 75- a potential Bearish Divergence
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Trending up since 3:00 AM on July 10 – attempting to break above the July high
    • RSI-21 is near around 65 – a potential Bearish Divergence
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 6:15 PM on July 12
  • The Bollinger Band is stable
  • Bias: Up

Previous Session

Major U.S. indices closed mostly higher on Wednesday, July 12, in higher volume. Dow Jones Transportation Average closed lower. The major indices gapped up at the open following a favorable CPI report. The indices retreated during the day and closed near or below their opens. All S&P sectors closed higher.

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