Morning Notes – Friday, August 16, 2024

Sunil Sharma

4 months ago

Directional Bias for the Day:

S&P Futures are lower at 8:00 AM – moving sideways to down since 11:00 AM on Thursday making a rounding top pattern,
The odds are for a sideways to down day – watch for a break above 5583.00 or a break below 5550.75 for clarity.
The economic data due during the day:
- Building Permits (1.43M est. prev. 1.45M) at 8:30 AM
- Housing Starts (1.34M est.; prev. 1.35M) at 8:30 AM
- Prelim UoM Consumer Sentiment (66.7 est.; prev. 66.4) at 10:00 AM.
- Prelim UoM Inflation Expectations (prev. 2.9%) at 10:00 AM

Weekly: Uptrend Under Pressure
Daily: Uptrend Resumed
120-Min: Up

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

Key Levels:

Critical support levels for the S&P 500 are 5532.53, 5526.26, and 5510.95.
Critical resistance levels for the S&P 500 are 5546.23, 5551.51, 5566.16.
The key levels for E-mini futures are 5583.00, the high at 2:30 AM and 5550.75, the low at 12:45 PM on Thursday.

Pre-Open

On Thursday at 4:00 PM, S&P futures (September 2024) closed at 5568.50, and the index closed at 5543.22 – a spread of about +25.25 points; the futures closed at 5567.50; the fair value is +1.00.
Pre-NYSE session open, futures were lower – at 7:45 AM, the S&P 500 futures were down by -6.75, Dow by -28, and NASDAQ by -6.25.

Markets Around the World

Markets in the East closed higher.
European markets are higher.
Currencies (Compared to two weeks ago):

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

Commodities (Compared to two weeks ago):
- Energy futures are higher.
- Precious metals are mixed.
- Industrial metals are mostly higher.
- Soft commodities are mostly lower.
Treasuries (Compared to two weeks ago)
- The 10-year yield closed at 3.915, down -6.7 basis points from two weeks ago.
- The 30-year is at 4.171%, down -10.7 basis points.
- The 2-year yield is at 4.101%, down -5.5 basis points.
- The 10-Year-&-2-Year spread is at -0.186, down from -0.174.
- The 30-Year-&-10-Year spread is at 0.256, down from 0.296.
VIX
- At 15.41 @ 7:45 AM; up from the last close; below the 5-day SMA
- Recent high = 65.73 on August 5; low = 14.72 on July 23; Sentiment: Risk-off

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 candle without any shadows that gapped up at the open above the downtrend line from all-time high. Stochastic (9, 1, 3): %K is above the %D. RSI-9 is near 65; above 8-day EMA. Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA. Uptrend
*2-Hour (E-mini futures)*	Uptrend since 6:00 PM on August 7. Broke above a down-trending regression channel that started at 4:00 PM on July 16. Just below the next resistance, 5600.75, the high at 8:00 AM on August 1. RSI-21 has declined to just above 60 from above 85. Above EMA20, which crossed above the EMA10 of EMA50. Bias: Up
*30-Minute (E-mini futures)*	Drifting sideways to down since 11:00 AM on Thursday. RSI-21 has declined to below 50 from near 80 and after making Bearish Divergence. Below EMA20, but above EMA10 of EMA50. Bias: Up-Side
*15-Minute (E-mini futures)*	The Bollinger Band (20, 2.0) has been moving down since 5:30 AM. The Bollinger Band has been expanding since 5:30 AM with the price walking down the lower band. Bias: Side-Down

Previous Session

Major U.S. indices closed higher on Thursday, August 15 in higher volume. S&P 500, NASDAQ Composite, and FT Wilshire 5000 Total Market Index have broken above the downtrend lines form their respective all-time highs. All but two S&P sectors – Technology and Real Estate – closed higher.

The dollar index closed higher at 102.81; energy futures closed mixed, the precious metals and the industrial metals closed up, and the soft commodities closed mostly lower. The US Treasury yields closed up as the bonds declined.

From Briefing.com

Nasdaq Composite: +17.2% YTD
S&P 500: +16.2% YTD
S&P Midcap 400: +8.2% YTD
Dow Jones Industrial Average: +7.6% YTD
Russell 2000: +5.4% YTD

Reviewing today’s economic data:

August Philadelphia Fed Index -7.0; Prior 13.9
July Retail Sales 1.0% (Briefing.com consensus 0.3%); Prior was revised to -0.2% from 0.0%, July Retail Sales Ex-Auto 0.4% (Briefing.com consensus 0.2%); Prior was revised to 0.5% from 0.4%
Weekly Initial Claims 227K (Briefing.com consensus 232K); Prior was revised to 234K from 233K, Weekly Continuing Claims 1.854 mln; Prior was revised to 1.871 mln from 1.875 mln
July Import Prices 0.1%; Prior 0.0%
July Import Prices ex-oil 0.1%; Prior 0.2%
July Export Prices 0.7%; Prior was revised to -0.3% from -0.5%
July Export Prices ex-ag. 1.0%; Prior was revised to -0.4% from -0.6%
August NY Fed Empire State Manufacturing -4.7; Prior -6.6
July Capacity Utilization 77.8% (Briefing.com consensus 78.6%); Prior was revised to 78.4% from 78.8%, July Industrial Production -0.6% (Briefing.com consensus 0.1%); Prior was revised to 0.3% from 0.6%
June Business Inventories 0.3% (Briefing.com consensus 0.2%); Prior 0.5%
August NAHB Housing Market Index 39 (Briefing.com consensus 43); Prior was revised to 41 from 42

Overseas:

Europe: DAX +1.7%, TSE +0.8%, CAC +1.2%
Asia: Nikkei +0.8%, Hang Seng -0.0%, Shanghai +0.9%

Commodities:

Crude Oil +1.18 @ 78.22
Nat Gas -0.02 @ 2.20
Gold +13.60 @ 2492.50
Silver +1.07 @ 28.40
Copper +0.11 @ 4.15