Morning Notes – Wednesday, August 9, 2023

/ August 9, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM. Futures are moving sideways since 5:00 AM.
  • The odds are for an up day – watch for a break below 4523.00 and 4515.50 for a change of sentiments
  • No major economic data report is due during the day

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 44503.31, 4485.19, and 4464.29
  • Critical resistance levels for S&P 500 are 4519.84, 4529.15, and 4540.34
  • The key levels for E-mini futures are 4536.25, the high at 5:00 AM, and 4523.00, the low at 7:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2023) closed at 4517.25, and the index closed at 4499.38 – a spread of about +18.00 points; the futures closed at 4518.50; the fair value is -1.25
  • Pre-NYSE session open, futures were higher- at 8:00 AM, S&P 500 futures were up by +8.50, Dow by +38, and NASDAQ by +25.25

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Sydney closed lower
  • European markets are 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 higher
    • 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 4.026, up +11.4 basis points from two weeks ago;
    • The 30-year is at 4.204%, up +24.9 basis points
    • The 2-year yield is at 4.757%, down -12.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.731, up from -0.966
    • The 30-Year-&-10-Year spread is at 0.178, up from +0.043
  • VIX
    • At 15.77 @ 7:30 AM; down from the last close; below the 5-day SMA;
    • Recent high = 18.14 on August 8; low = 12.73 on June 22
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on August 4 was a relatively large red candle just below a resistance level created by the high of the week of March 28, 2022.
    • Stochastic (9,1, 3): %K crossed below the %D;
    • RSI-9 declined to just above 60 from above 75
  • The week was down -104.20 or -2.3%; the 5-week ATR  is 96.19
  • A down week, second in the last five weeks, and third in the previous ten weeks;
  • The weekly pivot point=4515.60, R1=4556.65, R2=4635.27; S1=4436.98, S2=4395.93; S1/S2 pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A Dragon Fly DojiHarami candle that made a new low since July 27 high.

    • Stochastic (9, 1, 3): %K turned down above %D
    • RSI-9 is around 45; below 8-DMA
  • At/above 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Lower highs and lower lows since 8:00 AM on July 27; broke below a Horizontal Channel bounded between 4609.25 and 4553.75 on August 2 – 100% extension target near 4498.00 is achieved and the 161.8% extension target is near 4463.95; a bounce from around 4482.00 on Tuesday has broken above a downtrend line and is near the August 7 high.
    • RSI-21 is above 60 from around 30; Bullish Divergence
    • Above EMA20 and at EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Bounced up more than 50 points from the low of 4482.00 at 11:00 AM on Tuesday
  • RSI-21 is below 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 2:30 PM on Tuesday.
  • The Bollinger Band is narrowing and flattening since 7:00 AM.
  • Bias: Up-Side

Previous Session

Major U.S. indices closed lower on Tuesday, August 8, in higher volume.

The major indices opened lower and then declined further until mid-day when they started to recover. The indices closed near the opening level of the day. All but three S&P sectors – Energy, Utilities, and Healthcare – closed lower.

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