Market Remarks

Morning Notes – Thursday, September 7, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM; moving down since 3:45 PM on Wednesday – down more than 35 points
  • The odds are for a down day – watch for a break above 4464.25 for a change of sentiments
  • The major economic data report due during the day:
    • Unemployment Claims ( 216K vs. 232K est.; prev. 228K) at 8:30 AM
    • Revised Nonfarm Productivity ( 3.5% vs. 3.5% est.; prev. 3.7%) at 8:30 AM
    • Revised Labor Costs ( 2.2% vs. 1.8% est.; prev. 1.6%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for the S&P 500 are 4415.17, 4401.67, and 4380.12
  • Critical resistance levels for the S&P 500 are 4442.38, 4467.45, and 4482.68
  • The key levels for E-mini futures are 4464.25, the high at 5:45 AM and 4423.50, the low at 2:00 PM on August 28

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2023) closed at 4471.00, and the index closed at 4465.48 – a spread of about +5.50 points; the futures closed at 4471.50; the fair value is -0.50
  • Pre-NYSE session open, futures were lower – at 9:00 AM, S&P 500 futures were down by -33.50, Dow by -79, and NASDAQ by -198.00

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai and Singapore closed up
  • European markets are mixed – the UK, France, and Switzerland are higher; Germany, Spain, Itlay, and Stoxx 600 are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • EUR/USD
  • GBP/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.282, up +8.4 basis points from two weeks ago;
    • The 30-year is at 4.354%, up +7.0 basis points
    • The 2-year yield is at 5.029%, up +7.9 basis points;
    • The 10-Year-&-2-Year spread is at -0.747, up from -0.752
    • The 30-Year-&-10-Year spread is at 0.075, down from +0.086
  • VIX
    • At 15.27 @ 8:30 AM; up from the last close; above the 5-day SMA;
    • Recent high = 18.88 on August 18; low = 13.02 on September 1
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on September 1 was a green candle with small upper and lower shadows
    • Stochastic (9,1, 3): %K is above the %D;
    • RSI-9 is above 60
  • The week was up +110.06 or +2.5%; the 5-week ATR  is 119.13
  • Second up week in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=4490.67, R1=4566.35, R2=4616.94; S1=4440.08, S2=4364.40; R1/R2 pivot levels were breached
  • Above 10-week EMA; 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A red candle that gapped down and closed with almost no upper shadow and a lower equal to the real body. Completed a three-day Evening Star pattern from a resistance around the 4550.00 level, which was created by a gap-down move on August 2.
    • Stochastic (9, 1, 3): %K is below the %D
    • RSI-9 is below 50; below 8-DMA
  • At/below 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Moving down since 10:00 AM on September 1; a head-&-shoulder pattern is emerging.
    • RSI-21 has dipped below 30
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (E-mini futures)
  • Trending down since 9:30 AM on Friday
    • RSI-21 has been moving around 40 since 3:30 PM on Tuesday
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 12:45 AM.
  • The Bollinger Band has been expanding since 7:30 AM with the price walking down the lower band.
  • Bias: Down

Previous Session

Major U.S. indices closed lower on Wednesday, September 6, in mostly higher volume. The Russell 2000 traded in lower volume.

The major indices gapped down at the open and traded lower for most of the day with a small bounce near the close. All but two S&P sectors – Energy and Utilities – closed lower.

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