Morning Notes – Friday, September 1, 2023

/ September 1, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moving up since 2:45 AM – up more than 30 points from a low of 4513.50
  • The odds are for an up day – watch for a break below 4523.00 for a change of sentiments
  • The major economic data report due during the day:
    • Non-Farm Employment Change ( 187K vs. 169K est.; prev. 157K) at 8:30 AM
    • Average Hourly Earnings ( 0.2% vs. 0.3% est.; prev. 0.4% ) at 8:30 AM
    • Unemployment Rate ( 3.8% vs. 3.5% est.; prev. 3.5%) at 8:30 AM
    • Final Manufacturing PMI ( 47.0 est.; prev. 47.0 ) at 9:45 AM
    • ISM Manufacturing PMI ( 46.9 est.; prev. 46.4) at 10:00 AM
    • ISM Manufacturing Prices ( 43.9 est.; prev. 42.6) at 10:00 AM
    • Construction Spending ( 0.5% est.; prev. 0.5% ) at 10:00 Am

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for the S&P 500 are 4532.26, 4508.28, and 4493.59
  • Critical resistance levels for the S&P 500 are 4540.34, 4550.93, and 4567.53
  • The key levels for E-mini futures are 4546.25, the high at 8:30 AM and 4523.00, the low at 8:305 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2023) closed at 4514.25, and the index closed at 4507.66 – a spread of about +6.50 points; the futures closed at 4516.00; the fair value is -1.75
  • Pre-NYSE session open, futures were higher – at 8:45 AM, S&P 500 futures were up by +28:75, Dow by +181, and NASDAQ by +91.50

Markets Around The World

  • Markets in the East closed mostly higher – Sydney was down; Hong Kong and Singapore were closed
  • European markets are mixed – Germany, Italy, and Switzerland are lower; the UK, France, Spain, and STOXX 600 are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.091, down -21.7 basis points from two weeks ago;
    • The 30-year is at 4.221%, down -19.1 basis points
    • The 2-year yield is at 4.871%, down -6.0 basis points;
    • The 10-Year-&-2-Year spread is at -0.780, down from -0.623
    • The 30-Year-&-10-Year spread is at 0.130, up from +0.104
  • VIX
    • At 13.49 @ 8:30 AM; down from the last close; below the 5-day SMA;
    • Recent high = 18.88 on August 18; low = 12.74 on July 27
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on August 25 was a small green Haram with an upper shadow longer than the lower shadow and the real body.
    • Stochastic (9,1, 3): %K turned up below the %D;
    • RSI-9 turned up above 50
  • The week was up +36.00 or +0.8%; the 5-week ATR  is 107.72
  • Second up week in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=4406.77, R1=4457.24, R2=4508.78; S1=4355.23, S2=4304.76; No pivot levels were breached
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A relatively small red candle with almost no lower shadow and an upper shadow longer than the real body at resistance around the 4525.00 level.

    • Stochastic (9, 1, 3): %K is below the %D, above 90;
    • RSI-9 is above 60; 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 10:00 AM on August 25; near a resistance level around 4545.00
    • RSI-21 is moving above 70;
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to up since 2:00 PM on Wednesday.
    • RSI-21 has moved up above 65 from below 50
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 3:00 AM.
  • The Bollinger Band has been expanding since 4:45 AM with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Thursday, August 31, in mixed volume. NASDAQ Composite closed higher. The Dow Jones Industrial Average and the Transportation Average traded in higher volume. The major indices opened higher and made the day’s high by late morning and then mostly drifted lower for the rest of the day.

All but three S&P sectors – Consumer Discretionary, Technology, and Communication Services – closed lower.

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