Morning Notes – Wednesday, April 3, 2024

/ April 3, 2024

Directional Bias for the Day:

  • S&P Futures are moving within a trading range between 4263.25 and 4246.50 since Tuesday’s NYSE close.
  • The odds are for a sideways day – watch for a break above 5263.25 or a break below 5246.50 for clarity.
  • The major economic data report due during the day:
    • ADP Non-Farm Employment Change (148K est.; prev. 140K) at 8:15 AM.
    • Final Services PMI (51.7 est.; prev. 51.7) at 9:45 AM.
    • ISM Service PMI (52.8 est.; prev. 52.6) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5192.42, 5184.05, and 5171.55.
  • Critical resistance levels for the S&P 500 are 5217.81, 5229.20, and 5247.24.
  • The key levels for E-mini futures are 5263.25, the high at 4:30 PM on Tuesday, and 5246.50, the low at 2:00 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2024) closed at 5261.00, and the index closed at 5205.81 – a spread of about +54.25 points; the futures closed at 5260.50; the fair value is +0.50.
  • Pre-NYSE session open, futures were lower – at 7:15 AM, the S&P 500 futures were down by -6.00, Dow by -15, and NASDAQ by -39.50.

Markets Around the World

  • Markets in the East closed lower.
  • European markets are mostly higher – the UK an STOXX-600 are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are mixed.
    • Industrial metals are mostly higher.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.365, up +6.8 basis points from two weeks ago.
    • The 30-year is at 4.509%, up +6.8 basis points.
    • The 2-year yield is at 4.701%, up +0.6 basis points.
    • The 10-Year-&-2-Year spread is at -0.336, up from -0.399.
    • The 30-Year-&-10-Year spread is at 0.144, unchanged.
  • VIX
    • At 15.10 @ 7:15 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-Neutral

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 Dragonfly Doji that gapped down; just 1.1% below all-time high.
  • Moving up within an upsloping channel since late October 2023.
    • Stochastic (9, 1, 3): %K is below the %D after making a Bearish Divergence
    • RSI-9 is making a coiling pattern since January; turned down to just below 50; 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 below the lower band of the channel.
    • RSI-21 has bounced up to near 40 from to below 20.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Forming a down sloping flag after bouncing up from Tuesday’s low of 5235.00.
  • Broke below a Head-&-Shoulder pattern on Tuesday. 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 bounced up to near 50 after falling below 25.
    • At/above EMA20, which is below EMA10 of EMA50,
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to down since 12:15 AM.
  • The Bollinger Band is narrow and stable.
  • Bias: Side

Previous Session

Major U.S. indices closed lower on Tuesday, April 2 in higher volume. The major indices gapped down at the open. They made day’s lows in the first hour of trading and then drifted higher for the rest of the day but did fill the opening gap.

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

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