Morning Notes – Tuesday, April 2, 2024

/ April 2, 2024

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM. Broke below support levels at 5282.25 at 6:30 AM after moving within a horizontal channel since Monday morning. At 8:30 AM futures broke below another support level at 5263.00.
  • The odds are for a down day with elevated volatility – watch for a break above 5262.50 for a change of sentiments.
  • The major economic data report due during the day:
    • JOLTS Job Openings (8.76M est.; prev. 8.86M) at 10:00 AM.
    • Factory Orders (1.1% est.; prev. -3.6%) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Side-Down
  • 30-Min: Down
  • 15-Min: Down
  • 6-Min: Down

Key Levels:

  • Critical support levels for the S&P 500 are 5203.42, 5184.88, and 5171.55.
  • Critical resistance levels for the S&P 500 are 5213.92, 5229.20, and 5247.24.
  • The key levels for E-mini futures are 5262.50, the high at 8:30 AM, and 5233.00, the low at 12:00 PM on March 20.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2024) closed at 5294.00, and the index closed at 5243.77 – a spread of about +50.25 points; the futures closed at 5295.25; the fair value is -1.25.
  • Pre-NYSE session open, futures were lower – at 9:00 AM, the S&P 500 futures were down by -36.75, Dow by -312, and NASDAQ by -173.25.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Sydney, and Mumbai closed down; Hong Kong, Tokyo, Seoul, and Singapore closed higher.
  • European markets are mostly lower – the UK is 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 mixed.
    • Industrial metals are lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.387, up +13.4 basis points from two weeks ago.
    • The 30-year is at 4.524%, up +9.8 basis points.
    • The 2-year yield is at 4.711%, down -3.6 basis points.
    • The 10-Year-&-2-Year spread is at -0.324, up from -0.407.
    • The 30-Year-&-10-Year spread is at 0.137, up from +0.126.
  • VIX
    • At 14.57 @ 9:00 AM; up from the last close; above the 5-day SMA
    • Recent high = 16.04 on March 11; low = 12.40 on March 21; Sentiment: Risk-Off

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

Weekly:
  • The week ending on March 29 was a green spinning top candle at the all-time highs with small upper and lower shadows.
  • Broke above a down-sloping Flag on November 14 – the 100% extension target around 4901.00 is achieved, and the 161.8% extension target is near 5395.00.
    • Stochastic (9,1, 3): %K is above the %D; near 100.
    • RSI-9 is above 80.
  • The week was up +20.17 or +0.4%; the 5-week ATR is 101.93.
  • Third up week in the last five weeks and seventh in the previous ten weeks
  • The weekly pivot point=5240.87, R1=5278.33, R2=5302.30; S1=5216.90, S2=5179.44; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A red candle with small upper shadow and a lower shadow larger than the real body.
  • Moving up within an upsloping channel since late October 2023.
    • Stochastic (9, 1, 3): %K crossed below the %D – Bearish Divergence
    • RSI-9 is making a coiling pattern since January; turned down below 65; below 8-day EMA; Bearish Divergence.
  • Above 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend
2-Hour (E-mini futures)
  • Moving higher within an upsloping Linear Regression channel of one StdDev since early-January – the price has declined to the lower band of the channel.
    • RSI-21 has declined to below 20 from around 75 at the start of the month.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Moving down since 4:00 AM; broke below a support level around 5263.00. Forming a Head-&-Shoulder pattern – the 61.8% extension target is near 5220.00, the 100% extension target is near 5190.00, and the 161.8% extension target is near 5145.00.
    • RSI-21 has fallen below 25.
    • 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 5:45 AM.
  • The Bollinger Band has been expanding since 5:45 AM with the price walking down the lower band.
  • Bias: Down

Previous Session

Major U.S. indices closed mostly lower on Monday, April 1 in mostly lower volume. NASDAQ Composite gained 0.1% in higher volume. The major indices opened lower and made day’s lows by mid-day before drifting sideways to up for the rest of the day.

All but three S&P sectors – Energy, Technology, and Communication Services – closed lower. The dollar index, energy futures, and precious metals closed higher. The industrial metals closed mixed, and the soft commodities closed mostly higher. The bonds closed down, i.,e., the US Treasury Yields closed higher.

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