Market Remarks

Morning Notes – Tuesday, August 13, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM – moved up more than 30 points since 6:45 AM.
  • The odds are for an up day with elevated volatility; watch for a break below 5384.75 for a change in sentiments.
  • The major economic data due during the day:
    • PPI (-0.3% vs. 0.2% est. prev. 0.2%) at 8:30 AM
    • Core PPI (0.0% vs. 0.1% est.; prev. 0.3%) at 8:30 AM
  • Weekly: Uptrend Under Pressure
  • Daily: Market In Correction
  • 120-Min: Side-Up
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 5345.58, 5331.70, and 5324.37.
  • Critical resistance levels for the S&P 500 are 5355.86, 5364.78, and 5371.20.
  • The key levels for E-mini futures are 5409.25, the high at 8:30 AM and 5384.75, the low at 8:30 AM.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2024) closed at 5371.75, and the index closed at 5344.39 – a spread of about +27.25 points; the futures closed at 5369.75; the fair value is +2.00.
  • Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +32.25, Dow by +115, and NASDAQ by +158.25.

Markets Around the World

  • Markets in the East closed mostly higher – Mumbai closed down.
  • European markets are mostly higher – France and Italy are 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 higher.
    • Precious metals are higher.
    • Industrial metals are mostly lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.908, down -27.1 basis points from two weeks ago.
    • The 30-year is at 4.203%, down -22.4 basis points.
    • The 2-year yield is at 4.028%, down -38.2 basis points.
    • The 10-Year-&-2-Year spread is at -0.120, up from -0.231.
    • The 30-Year-&-10-Year spread is at 0.295, down 0.248.
  • VIX
    • At 19.82 @ 8:45 AM; down from the last close; below the 5-day SMA
    • Recent high = 65.73 on August 5; low = 15.95 on August 1; Sentiment: Risk-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 relatively small Doji candle just below 50-day EMA 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.
    • 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)
  • Drifted up to the upper bound 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.
    • At/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 moved above 60.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 7:30 PM on Sunday.
  • The Bollinger Band has expanded a bit since 2:15 AM with the price near the upper bound.
  • Bias: Side

Previous Session

Major U.S. indices closed mostly lower on Monday, August 12 in mostly lower volume. The volume for all indices has mostly declined every day of the day since August 5. S&P 500 and NASDAQ Composite gained a bit and Dow Transports traded in higher volume. The past few days’ price action is emerging as up-sloping flags for all indices.

All but three S&P sectors – Energy, Technology, and Utilities – closed lower. The dollar index closed higher at 102.96; energy and metals – precious and industrial – futures closed higher and the soft commodities closed mixed. The US Treasury yields closed up as the bonds declined.

From Briefing.com

  • S&P 500: +12.1% YTD
  • Nasdaq Composite: +11.8% YTD
  • S&P Midcap 400: +4.8% YTD
  • Dow Jones Industrial Average: +4.4% YTD
  • Russell 2000: +1.7% YTD

Reviewing today’s economic data:

  • There were no notable US economic data on Monday.

Tuesday’s economic lineup feature:

  • 6:00 ET: July NFIB Small Business Optimism (prior 91.5)
  • 8:30 ET: July PPI (Briefing.com consensus 0.1%; prior 0.2%) and Core PPI (Briefing.com consensus 0.2%; prior 0.4%)

Overseas:

  • Europe: DAX -0.1%, TSE +0.5%, CAC -0.3%
  • Asia: Nikkei +0.6%, Hang Seng +0.1%, Shanghai -0.1%

Commodities:

  • Crude Oil +3.13 @ 79.91
  • Nat Gas +0.04 @ 2.19
  • Gold +31.00 @ 2504.90
  • Silver +0.36 @ 27.97
  • Copper +0.07 @ 4.07
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