Morning Notes – Wednesday, September 4, 2024

/ September 4, 2024

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM.
  • Making a rounding bottom since 4:00 PM on Tuesday between 5547.00 and 5506.00.
  • The odds are for a down day with a good chance of a sideways to up move from the pre-open levels around 5520.00. Watch for a break above 5547.25 for a change in sentiments.
  • The economic data due during the day:
    • Trade Balance (-78.8B vs. -78.8B est.; prev. -73.0B) at 8:30 AM
    • JOLTS Job Openings (8.09 M est.; prev. 8.18M) at 10:00 AM
    • Factory Orders (4.7% est.; prev. -3.3%) at 10:00 AM
    • Beige Book at 2:00 PM
  • Weekly: Uptrend Resumed
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5501.13, 5463.22, and 5422.09.
  • Critical resistance levels for the S&P 500 are 5529.45, 5538.73, and 5545.76.
  • The key levels for E-mini futures are 5530.5, the high at 5:45 AM and 5506.75, the low at 3:00 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2024) closed at 5543.25, and the index closed at 5528.93 – a spread of about +14.25 points; the futures closed at 5541.75; the fair value is +1.25.
  • Pre-NYSE session open, futures were lower – at 9:00 AM, the S&P 500 futures were down by -15.50, Dow by -45, and NASDAQ by -96.50.

Markets Around the World

  • Markets in the East closed lower.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • NZD/USD
  • INR/USD
  • Dollar index
  • USD/CHF
  • AUD/USD
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • 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 3.835, up +2.5 basis points from two weeks ago.
    • The 30-year is at 4.125%, up +6.2 basis points.
    • The 2-year yield is at 3.873%, down -11.9 basis points.
    • The 10-Year-&-2-Year spread is at -0.038, up from -0.182.
    • The 30-Year-&-10-Year spread is at 0.291, up from 0.253.
  • VIX
    • At 23.09 @ 8:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 29.47 on August 08; low = 14.46 on August 19; Sentiment: Risk-Off

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 large red candle with almost no upper shadow and a small lower shadow. Broke below a trading range that lasted since August 20.
    • Stochastic (9, 1, 3): %K crossed below the %D.
    • RSI-9 is below 50; below the 8-day EMA.
  • Below 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Broke below a trading range between 5669.75 and 5561.25 – the 61.8% retracement target is around 5494.00, the 100% retracement target is around 5452.00, and the 161.8% retracement target is around 5385.00.
    • RSI-21 has bounced up to above 30 from around 10.
    • Below EMA20, which is below the EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Making a rounding bottom since 4:00 PM on Tuesday, A break above 5547.00 will confirm the pattern.
    • RSI-21 is just above 50 after making a couple of Bullish Divergences.
    • Above EMA20 and at/below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 1:15 AM.
  • The Bollinger Band has been contracting since 8:00 AM.
  • Bias: Side

Previous Session

Most major U.S. indices closed lower on Tuesday, September 3 in mixed volume. Dow Jones Transportation Average, NASDAQ Composite, and Russell 2000 traded in higher volume. The major indices opened lower and then traded down for the rest of the day. All but two S&P 500 sectors – Staples and Real Estate – closed lower. 

The dollar index closed higher at 101.77, the energy futures closed mixed, metals – precious and industrials – metals closed down, and most of the soft commodities closed higher. The US Treasury yields closed lower as the bonds rose.

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