Market Remarks

Morning Notes – Monday, August 19, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are a little higher at 8:45 AM – moving up within a range from its lower limit.
  • The odds are for a sideways to an up day – watch for a break below 5566.25 or a break above 5592.00 for clarity.
  • No significant economic data due during the day.
  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 5548.33, 5532.96, and 5525.17.
  • Critical resistance levels for the S&P 500 are 5558.94, 5561.98, and 5566.16.
  • The key levels for E-mini futures are 5592.00, the high at 11:30 PM and 5565.25, the low at 4:00 AM.

Pre-Open

  • On Friday at 4:00 PM, S&P futures (September 2024) closed at 5578.25, and the index closed at 5554.25 – a spread of about +24.00 points; the futures closed at 5578.25; the fair value is +0.00.
  • Pre-NYSE session open, futures were mixed – at 8:45 AM, the S&P 500 futures were up by +5.00, Dow down by -6, and NASDAQ up by 21.75.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Sydney, and Singapore closed up; Tokyo, Mumbai, and Seoul closed down.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Dollar index
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are mostly higher.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.885, up +9.2 basis points from two weeks ago.
    • The 30-year is at 4.142%, up +3.4 basis points.
    • The 2-year yield is at 4.060%, up +17.0 basis points.
    • The 10-Year-&-2-Year spread is at -0.175, down from -0.097.
    • The 30-Year-&-10-Year spread is at 0.257, down from 0.315.
  • VIX
    • At 15.55 @ 8:45 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 16 was the second relatively large green candle with almost no upper and lower shadows closing just 2.0% below the all-time high of 5669.67.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is around 65.
  • The week was up 210.09 or 3.9%; the 5-week ATR is 221.63.
  • First up week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5480.20, R1=5636.03, R2=5717.81; S1=5398.42, S2=5242.59; R1/R2 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Resumed
Daily
  • A green candle without small shadows above the downtrend line from all-time high.
    • Stochastic (9, 1, 3): %K crossed below the %D near 100.
    • RSI-9 is just below 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 a resistance level of 5600.75, the high at 8:00 AM on August 1.
    • RSI-21 is around 65 after making a Bearish Divergence at 6:00 PM on Sunday.
    • Above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up
30-Minute (E-mini futures)
  • Drifting sideways since 11:00 AM on August 15.
    • RSI-21 has been moving around 50.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 6:00 AM.
  • The Bollinger Band has been expanding since 6:00 AM with the price walking up the upper band.
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Friday, August 16 in mostly lower volume. NASDAQ Composite traded in lower volume. All but three S&P sectors – Energy, Industrials, and Real Estate – closed higher.

The dollar index closed lower at 102.31; energy futures closed lower, the precious metals closed up and the industrial metals closed mixed, and the soft commodities closed mostly higher. The US Treasury yields closed down as the bonds advanced.

From Briefing.com

The stock market exhibited lackluster action. The S&P 500 (+0.2%), Nasdaq Composite (+0.2%), Dow Jones Industrial Average (+0.2%), and Russell 2000 (+0.2%) ultimately settled with modest gains near their best levels of the day.

  • Nasdaq Composite: +17.5% YTD
  • S&P 500: +16.4% YTD
  • S&P Midcap 400: +8.2% YTD
  • Dow Jones Industrial Average: +7.9% YTD
  • Russell 2000: +5.7% YTD

Reviewing today’s economic data:

  • July Building Permits 1.396 mln (Briefing.com consensus 1.440 mln); Prior was revised to 1.454 mln from 1.446 mln, July Housing Starts 1.238 mln (Briefing.com consensus 1.350 mln); Prior was revised to 1.329 mln from 1.353 mln
  • August Univ. of Michigan Consumer Sentiment – Prelim 67.8 (Briefing.com consensus 66.7); Prior 66.4

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
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