Market Remarks

Morning Notes – Wednesday, August 21, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are a little higher at 8:45 AM – moving up within a range, between 5632.25 and 5617.75, from its lower limit.
  • The odds are for a sideways day – watch for a break below 5617.75 or a break above 5632.25 for clarity.
  • The economic data due during the day:
    • FOMC Meeting Minutes at 2:00 PM
  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5596.33, 5585.50, and 5570.65,
  • Critical resistance levels for the S&P 500 are 5603.51, 5608.56, and 5620.33.
  • The key levels for E-mini futures are 5632.25, the high at 2:15 PM on Tuesday and 5619.25, the low at 5:00 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2024) closed at 5621.00, and the index closed at 5597.12 – a spread of about +24.75 points; the futures closed at 5619.75; the fair value is +1.25.
  • Pre-NYSE session open, futures were higher – at 8:30 AM, the S&P 500 futures were up by +11.75, Dow by +70, and NASDAQ by 38.50.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Tokyo closed down; Sydney, Mumbai, Seoul, and Singapore closed up;
  • European markets are mostly higher – Switzerland is down.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.810, down -8.7 basis points from two weeks ago.
    • The 30-year is at 4.063%, down -11.9 basis points.
    • The 2-year yield is at 3.992%, up +0.5 basis points.
    • The 10-Year-&-2-Year spread is at -0.182, down from -0.090.
    • The 30-Year-&-10-Year spread is at 0.253, down from 0.285.
  • VIX
    • At 16.04 @ 8:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 65.73 on August 5; low = 14.46 on August 19; Sentiment: Risk-Neutral

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 small Doji candle near the close of the previous day’s green candle. Broke above the downtrend line from all-time high on August 15.
    • Stochastic (9, 1, 3): %K is below the %D but still above 90.
    • RSI-9 is just above 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. Moving sideways after breaking just above a resistance level of 5600.75, the high at 8:00 AM on August 1.
    • RSI-21 is around 65 after dipping to 50 from above 80.
    • At/above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Drifting sideways since 11:00 AM on August 15.
    • RSI-21 has risen to 60 after moving around 50 for some time.
    • Above EMA20, which is at/above EMA10 of EMA50.
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways.
  • The Bollinger Band has been expanding a bit since 6:30 AM with the price walking up the upper band.
  • Bias: Side

Previous Session

Major U.S. indices closed lower on Tuesday, August 20 in mixed volume. S&P 500 and Dow Jones Transportation Average traded in lower volume. The day’s price action was subdued. All but three S&P sectors – Staples, Healthcare, and Real Estate – closed lower.

The dollar index closed lower at 101.73; energy futures closed down, the precious metals closed up, the industrial metals closed down and most soft commodities closed higher. The US Treasury yields closed down as the bonds advanced.

From Briefing.com

It was effectively a consolidation trade with neither buyers nor sellers showing a great deal of conviction at the index level.

There was no U.S. economic data of note today.

  • Nasdaq Composite: +18.7% YTD
  • S&P 500: +17.3% YTD
  • S&P Midcap 400: +8.3% YTD
  • Dow Jones Industrial Average: +8.3% YTD
  • Russell 2000: +5.7% YTD

Overseas:

  • Europe: DAX -0.4%, TSE -1.0%, CAC -0.2%
  • Asia: Nikkei +2.0%, Hang Seng -0.3%, Shanghai -0.9%

Commodities:

  • Crude Oil -0.60 @ 73.17
  • Nat Gas -0.04 @ 2.20
  • Gold +9.90 @ 2550.10
  • Silver +0.23 @ 29.48
  • Copper -0.03 @ 4.15
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