Morning Notes – Monday, August 12, 2024

Sunil Sharma

3 months ago

Directional Bias for the Day:

S&P Futures are higher at 9:00 AM – moving up in an up-sloping flag since 8:30 AM on Friday.
The odds are for a sideways to an up day with elevated volatility; watch for a break above 5389.50 and a break below 5366.00 for clarity.
No major economic data is due during the day:

Weekly: Uptrend Under Pressure
Daily: Market In Correction
120-Min: Side-Up

30-Min: Side
15-Min: Side-Up
6-Min: Up

Key Levels:

Critical support levels for the S&P 500 are 5335.79, 5330.24, and 5312.99.
Critical resistance levels for the S&P 500 are 5358.67, 5383.89, and 5410.42.
The key levels for E-mini futures are 5389.50, the high at 8:30 AM and 5366.00, the low at 3:15 AM.

Pre-Open

On Friday at 4:00 PM, S&P futures (September 2024) closed at 5368.50, and the index closed at 5344.16 – a spread of about +24.25 points; the futures closed at 5370.25; the fair value is -1.75.
Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +10.75, Dow by +58, and NASDAQ by +43.25.

Markets Around the World

Markets in the East closed mixed – Shanghai, Mumbai, and Singapore closed down; Hong Kong, Sydney, and Seoul closed up; Tokyo was closed for trading.
European markets are mostly higher – France is lower.
Currencies (Compared to two weeks ago):

Up	Down
EUR/USD AUD/USD NZD/USD INR/USD	Dollar index GBP/USD USD/JPY USD/CHF USD/CAD

Commodities (Compared to two weeks ago):
- Energy futures are mixed.
- Precious metals are mixed.
- Industrial metals are mostly lower.
- Soft commodities are mostly higher.
Treasuries (Compared to two weeks ago)
- The 10-year yield closed at 3.944, down -25.6 basis points from two weeks ago.
- The 30-year is at 4.226%, down -22.8 basis points.
- The 2-year yield is at 4.063%, down -32.2 basis points.
- The 10-Year-&-2-Year spread is at -0.119, up from -0.185.
- The 30-Year-&-10-Year spread is at 0.282, down 0.254.
VIX
- At 20.55 @ 9:00 AM; up from the last close; below the 5-day SMA
- Recent high = 65.73 on August 5; low = 20.01 on August 2; Sentiment: Risk-Neutral-On

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

Weekly:	The week ending on August 9 was a relatively large green candle that closed near the close of previous week’s candle with almost no upper and lower shadows. It bounced off the 39-week EMA and is still -5.6% below the all-time high of 5669.67. Stochastic (9,1, 3): %K is at the %D. RSI-9 is around 50 after falling from above 80 and after making a bearish divergence. The week was down -2.40 or -0.0%; the 5-week ATR is 192.72. Fourth down week in the last five weeks and fifth in the previous ten weeks The weekly pivot point=5274.03, R1=5428.80, R2=5513.44; S1=5189.39, S2=5034.62; S1/S2 pivot levels were breached Below 10-week EMA; above 39-week SMA, and 89-week SMA Uptrend Under Pressure
*Daily*	A green Spinning Top with small upper and lower shadows breaking above the resistance of the upper bound of a down-gap. In a second leg of down move following a small up-sloping flag after declining from the all-time time – the 161.8% extension target around 5115.19 has been almost achieved and the 261.8% extension target is around 4836.50. Stochastic (9, 1, 3): %K is above the %D after making a Bullish Divergence. RSI-9 is above 45; above 8-day EMA. Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA. Market In Correction
*2-Hour (E-mini futures)*	Drifting up in the upper half of a down-trending regression channel since 12:00 PM on August 8 after breaking above a resistance level, which was the high of August 7 before the sharp decline of more than 170 points. RSI-21 is moving around 65 since 2:00 PM on Friday and is making Bearish Divergences. Above EMA20, which crossed above the EMA10 of EMA50. Bias: Side-Up
*30-Minute (E-mini futures)*	Drifting sideways to up since 10:00 AM on August 8. RSI-21 has been moving between 50 and 60. Above EMA20, which is above EMA10 of EMA50. Bias: Side
*15-Minute (E-mini futures)*	The Bollinger Band (20, 2.0) has been moving sideways to up since 7:35 PM on Sunday. The Bollinger Band is relatively stable and narrow. Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Friday, August 9 in lower volume. The volume for all indices has declined every day of the day since Monday. The market’s bounce from the low of Monday continues and the first of two down-gaps since the all-time highs has been filled, though the resistance levels at the upper bound of the gap have not been cleared connivingly. The past few days’ price action is emerging as up-sloping flags for all indices.

NYSE Composite and Dow Jones Industrial Average are the market leaders and NASDAQ Composite and Russell 2002 are the laggards since last week’s sharp market decline. DJIA is off by -4.5% from its all-time-high, NASDAQ Composite off by -10.3%, Russell 200 by -9.5%, Dow Transport by -6.1%, S&P 500 by -5.7%, NYSE Composite by -3.0%, and the Wilshire 5000 Total Market Index is off by -5.9% from their respective all-time highs.

All but one S&P sectors – Materials – closed higher. The dollar index closed lower at 103.04; energy futures closed up, and precious and industrials metals and the soft commodities closed mixed. The US Treasury yields closed down as the bonds rallied.

From Briefing.com

S&P 500: +12.0% YTD
Nasdaq Composite: +11.6% YTD
S&P Midcap 400: +5.6% YTD
Dow Jones Industrial Average: +4.8% YTD
Russell 2000: +2.7% YTD

Reviewing today’s economic data:

There were no notable US economic data on Friday.

Overseas:

Europe: DAX +0.3%, TSE -0.3%, CAC -0.3%
Asia: Nikkei -0.8%, Hang Seng +0.1%, Shanghai +0.0%

Commodities:

Crude Oil +0.87 @ 76.14
Nat Gas -0.02 @ 2.09
Gold +32.30 @ 2463.30
Silver +0.81 @ 27.64
Copper +0.03 @ 3.97