Morning Notes – Tuesday, September 3, 2024

/ September 3, 2024

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM.
  • Breaking below a flat pennant after declining more than 30 points during the Asian session – if the break occurs, then the 61.8% extension target would be around 5615.00, the 100% extension target around 5602.00, and the 161.8% extension target around 5580.00.
  • The odds are for a down day. Watch for a break above 5635.75 for a change in sentiments.
  • The economic data due during the day:
    • ISM Manufacturing PMI (47.5 est.; prev. 46.8) at 10:00 AM
    • ISM Manufacturing Prices (52,1 est.; prev. 52.9) at 10:00 AM
    • Construction Spending (0.1% est.; prev. -0.3%) at 10:00 AM
  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Down
  • 15-Min: Side-Down
  • 6-Min: Down-Side

Key Levels:

  • Critical support levels for the S&P 500 are 5606.81, 5596.25, and 5581.79.
  • Critical resistance levels for the S&P 500 are 5629.41, 5651.37, and 5669.67.
  • The key levels for E-mini futures are 5635.75, the high at 8:45 AM and 5627.25, the low at 7:00 AM.

Pre-Open

  • On Friday at 4:00 PM, S&P futures (September 2024) closed at 5658.25, and the index closed at 5648.40 – a spread of about +19.75 points; the futures closed at 5661.00; the fair value is -2.75.
  • Pre-NYSE session open, futures were lower – at 9:00 AM, the S&P 500 futures were down by -32.25, Dow by -216, and NASDAQ by -141.00.

Markets Around the World

  • Markets in the East closed mostly lower – Singapore closed up.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Dollar index
  • USD/CHF
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • Precious metals are lower.
    • Industrial metals are mostly lower.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.911, down -8.4 basis points from two weeks ago.
    • The 30-year is at 4.200%, up +5.8 basis points.
    • The 2-year yield is at 3.925%, down -13.5 basis points.
    • The 10-Year-&-2-Year spread is at -0.014, up from -0.065.
    • The 30-Year-&-10-Year spread is at 0.289, up from 0.147.
  • VIX
    • At 15.53 @ 8:45 AM; down from the last close; below 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 30 was a relatively small green candle with almost no upper shadow and a small lower shadow. Still closed just 0.6% below the all-time high of 5669.67.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is just 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=5620.32, R1=5679.70, R2=5710.99; S1=5589.03, S2=5529.65; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A green candle with almost no upper shadow and a lower shadow almost 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 crossed above the %D following a Bearish Divergence.
    • RSI-9 is around 65; above 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. Moving sideways in the upper half of a trading range between 5669.75 and 5561.25.
    • RSI-21 has dropped to around 35 from above 60.
    • At/above the EMA10 of EMA50, which is below EMA20.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving around 5630.00 since 5:30 Am after declining more than 30 points during the Asian session.
    • RSI-21 has been moving below 40.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 4:30 AM.
  • The Bollinger Band has been contracting since 8:45 AM.
  • Bias: Side-Down

Previous Session

Most major U.S. indices closed higher on Friday, August 30, the last trading day, in higher volume. All S&P 500 sectors closed higher. The major indices erased all the losses earlier in the month of August, advanced higher from July, and closed near the highs for the month.

The dollar index closed higher at 101.62, the energy futures and the precious metals closed down, most industrial metals closed lower, and the soft commodities closed mixed. The US Treasury yields closed higher as the bonds again slid.

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