Market Remarks

Morning Notes – Thursday, August 29, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM – moving up since 6:15 PM on Wednesday – up more than 45 points
  • The odds are for an up day with a good chance of a sideways to down move from the pre-open level of 5625.00 – watch for a break above 5635.25 or a break below 5615.00 for clarity.
  • The economic data due during the day:
    • Prelim GDP (3.0% vs. 2.8% est.; prev. 2.8%) at 8:30 AM
    • Unemployment Claims (231K vs. 232K est.; prev. 233L) at 8:30 AM
    • Prelim GDP Price Index (2.5% vs. 2.3% est.; prev. 2.3%) at 8:30 AM
    • Good Trade Balance (-102.7B vs. -97.7B est.; prev. -96.8B) at 8:30 AM
    • Prelim Wholesale Inventories (0.3% vs. 0.3% est.; prev. 0.2%) at 8:30 AM
    • Pending Home Sales (0.2% est.; prev. 4.8%) at 10:00 AM.
  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Up
  • 15-Min: Up
  • 6-Min: Up-Side

Key Levels:

  • Critical support levels for the S&P 500 are 5582.73, 5560.95, and 5548.33.
  • Critical resistance levels for the S&P 500 are 5623.75, 5630.92, and 5651.62.
  • The key levels for E-mini futures are 5635.25, the high at 8:30 AM and 5615.00, the low at 7:00 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2024) closed at 5611.50, and the index closed at 5692.18 – a spread of about +20.25 points; the futures closed at 5610.25; 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 +15.00, Dow by +263, and NASDAQ by +63.25.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Tokyo, Sydney, and Seoul closed down; Hong Kong, Mumbai, and Singapore closed up.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.840, unchanged from two weeks ago.
    • The 30-year is at 4.127%, up +0.2 basis points.
    • The 2-year yield is at 3.873%, down -9.3 basis points.
    • The 10-Year-&-2-Year spread is at -0.033, up from -0.0264.
    • The 30-Year-&-10-Year spread is at 0.287, up from 0.285.
  • VIX
    • At 16.02 @ 8:45 AM; down from the last close; above the 5-day SMA
    • Recent high = 18.06 on August 22 low = 14.46 on August 19; Sentiment: Risk-On-Neutral

The trend and patterns in various time frames for the S&P 500:

Weekly:
  • The week ending on August 23 was a relatively small green candle with almost no upper and lower shadows closing just 0.6% below the all-time high of 5669.67.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is below 70.
  • The week was up 80.36 or 1.4%; the 5-week ATR is 205.60.
  • Second up week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5609.52, R1=5668.31, R2=5702.00; S1=5575.83, S2=5517.04; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A red candle with almost no upper shadow and a lower shadow equal to the real body. Moving sideways since August 20 around the highest level since July 16, 2024, all-time high.
    • Stochastic (9, 1, 3): %K is below the %D following a Bearish Divergence.
    • RSI-9 is just below 60 and the 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. Trading a range between 5669.00 and 4451.25 8:00 AM on August 16.
    • RSI-21 is just above 55.
    • At/above the EMA10 of EMA50, which is above EMA20.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Trading up since 6:45 PM after making a low of 5561.25 at a support level. Up more than sixty points.
    • RSI-21 has risen to above 60 after making a Bullish Divergence.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 10:45 PM.
  • The Bollinger Band is a bit expanded but stable with the price near the upper band.
  • Bias: Up

Previous Session

Most major U.S. indices closed lower on Wednesday, August 28 in high volume. Dow Jones Transportation Average closed higher. The indices opened lower and then traded down for most of the day before bouncing up a little after 2:00 PM. All but two S&P sectors – Financials and Healthcare – closed down. Utilities were unchanged.

The dollar index closed higher at 100.99, the energy futures closed mixed, the metals – precious and industrial – closed down and so did most of the soft commodities. The US Treasury yields closed higher as the bonds slid.

From Briefing.com

The stock market closed with losses, but the major indices climbed off session lows in front of the close. Ultimately, the S&P 500 settled 0.6% lower and the Nasdaq Composite closed down 1.1% from yesterday. The index deterioration from opening levels coincided with mega caps and semiconductor-related shares building on initial losses in front of influential earnings news from the spaces after the close.

[…]
  • S&P 500: +17.2% YTD
  • Nasdaq Composite: +17.0% YTD
  • S&P Midcap 400: +10.0% YTD
  • Dow Jones Industrial Average: +9.0% YTD
  • Russell 2000: +8.0% YTD

Reviewing today’s economic data:

  • Weekly MBA Mortgage Applications Index 0.5%; Prior -10.1
[…]

Overseas:

  • Europe: DAX +0.6%, FTSE -0.0%, CAC +0.2%
  • Asia: Nikkei +0.1%, Hang Seng -1.0%, Shanghai -0.4%

Commodities:

  • Crude Oil -1.02 @ 74.59
  • Nat Gas +0.02 @ 2.10
  • Gold -15.90 @ 2538.00
  • Silver -0.76 @ 29.22
  • Copper -0.09 @ 4.21
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