Morning Notes – Thursday, August 22, 2024

/ August 22, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM – moving up since 11L00 PM – up more than 25 points
  • The odds are for an up to a sideways day – watch for a break below 5643.50 for a change of sentiments.
  • The economic data due during the day:
    • Unemployment Claims (232K vs. 232K est.; prev. 228K) at 8:30 AM
    • Flash Manufacturing PMI (49.5 est.; prev. 49.6) at 9:45 AM
    • Flash Services PMI (54.0 est.; prev. 55.0) at 9:45 AM
    • Existing Home Sales (3.94M est.; prev. 3.89M) at 10:00 AM
    • Jackson Hole Symposium
  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 5621.50, 5604.61, and 5591.57.
  • Critical resistance levels for the S&P 500 are 5628.13, 5632.68, and 5641.24.
  • The key levels for E-mini futures are 5656.25, the high at 8:00 AM and 5643.50, the low at 6:00 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2024) closed at 5640.25, and the index closed at 5620.85 – a spread of about +19.50 points; the futures closed at 5641.50; the fair value is -1.25.
  • Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +7.00, Dow by +17, and NASDAQ by +43.25.

Markets Around the World

  • Markets in the East closed mostly higher – Shanghai and Singapore closed down.
  • 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 mixed.
    • 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 3.802, down -15.2 basis points from two weeks ago.
    • The 30-year is at 4.079%, down -16.9 basis points.
    • The 2-year yield is at 3.943%, down -2.5 basis points.
    • The 10-Year-&-2-Year spread is at -0.141, down from -0.014.
    • The 30-Year-&-10-Year spread is at 0.277, down from 0.294.
  • VIX
    • At 16.17 @ 8:45 AM; down 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 spinning top candle following a Doji candle just 1% below all-time high.
    • Stochastic (9, 1, 3): %K is below the %D but still above 90.
    • RSI-9 is just below 70; 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 since 12:00 PM on August 19 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 is around 60.
    • At/above EMA20, which is at/above EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 2:45 AM.
  • The Bollinger Band is a bit expanded, but stable with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Wednesday, August 21 in mostly lower volume. S&P 500 traded in higher volume. The day’s price action for most indices was subdued. All but one S&P sectors – Financials – closed higher.

The dollar index closed lower at 100.91; energy futures closed down, the precious metals closed mixed, the industrial metals closed up and most soft commodities closed higher. The US Treasury yields closed mixed.

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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