Market Remarks

Morning Notes – Friday, September 6, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are lower at 8:15 AM. Makine a rounding saucer pattern around 5480.00 level since 3:15 AM.
  • Awaiting the Non-Farm Payroll report due at 8:30 AM. The odds are for a volatile day. Watch for a break above 5511.00 or a break below 5466.50.
  • The economic data due during the day:
    • Non-Farm Employment Change (164K est.; prev. 114K) at 8:30 AM.
    • Unemployment Rate (4.2% est.; prev. 4.3%) at 8:30 AM
    • Average Hourly Earnings (0.3% est.; prev. 0.2%) at 8:30 AM
  • Weekly: Uptrend Resumed
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Down-Side
  • 15-Min: Side-Down
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 5463.22, 5432.72, and 5415.91.
  • Critical resistance levels for the S&P 500 are 5491.00, 5519.22, and 5546.30.
  • The key levels for E-mini futures are 5511.00, the high at 11:00 PM and 5466.50, the low at 3:15 AM.

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2024) closed at 5515.00, and the index closed at 5503.41 – a spread of about +11.50 points; the futures closed at 5512.25; the fair value is +2.75.
  • Pre-NYSE session open, futures were lower – at 8:00 AM, the S&P 500 futures were down by -26.00, Dow by -130, and NASDAQ by -170.00.

Markets Around the World

  • Markets in the East closed mostly down – Sydney closed up; Hong Kong was closed.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Dollar index
  • EUR/USD
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are mostly lower.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.733, down -12.4 basis points from two weeks ago.
    • The 30-year is at 4.022%, down -10.2 basis points.
    • The 2-year yield is at 3.752%, down -26.4 basis points.
    • The 10-Year-&-2-Year spread is at -0.019, up from -0.159.
    • The 30-Year-&-10-Year spread is at 0.289, up from 0.267.
  • VIX
    • At 22.05 @ 7:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 23.31 on September 4; 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 relatively small red spinning top candle just above the upper bound of the up gap of August 15.
    • Stochastic (9, 1, 3): %K is below the %D.
    • RSI-9 is around 45; 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)
  • Moving sideways to down just below the lower bound of a trading range between 5669.75 and 5561.25. The 61.8% retracement target of the pattern around 5494.00 is achieved. The 100% retracement target is around 5452.00, and the 161.8% retracement target is around 5385.00.
    • RSI-21 is just below 33. Potential for Bullish Divergence.
    • Below EMA20, which is below the EMA10 of EMA50.
  • Bias: Down
30-Minute (E-mini futures)
  • Moving sideways to up since 3:00 AM after breaking below from a trading range.
    • RSI-21 has bounced up to 45 from near 30 and after making a Bullish Divergence.
    • At/below EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 2:30 AM.
  • The Bollinger Band has started to contract since 7:45 AM.
  • Bias: Side-Down

Previous Session

Most major U.S. indices closed mostly lower on Thursday, September 5 in mixed volume. NASDAQ Composite closed higher. Dow Jones Industrial Average and S&P 500 traded in lower volume. The indices opened higher and made the day’s high in the first hour of trading before trading lower. All but two S&P sectors – Discretionary and Communications – closed lower.

The dollar index closed lower at 101.07, the energy futures closed mixed, the metals – precious and industrials – closed higher, and the soft commodities closed mixed. The US Treasury yields closed lower as the bonds rose.

From Briefing.com

The market had a mixed showing again today. The Nasdaq Composite (+0.3%) settled slightly higher than yesterday, boosted by gains in some mega cap constituents. The S&P 500 settled 0.3% lower than yesterday, below its 50-day moving average (5,506).

[…]

The 10-yr note yield settled four basis points lower at 3.73% and the 2-yr note yield settled two basis points lower at 3.75%.

[…]

Eight of the 11 S&P 500 sectors settled with declines led by health care (-1.4%), industrials (-1.2%), and financials (-1.0%). The consumer discretionary (+1.4%), communication services (+0.5%), and information technology (+0.1%) sectors were alone in positive territory at the close, reflecting mega cap leadership.

[…]
  • S&P 500: +15.4% YTD
  • Nasdaq Composite: +14.1% YTD
  • Dow Jones Industrial Average: +8.1% YTD
  • S&P Midcap 400: +7.2% YTD
  • Russell 2000: +5.2% YTD

Reviewing today’s economic data:

  • August ADP Employment Change 99K (Briefing.com consensus 150K); Prior was revised to 111K from 122K
  • Weekly Initial Claims 227K (Briefing.com consensus 236K); Prior was revised to 232K from 231K, Weekly Continuing Claims 1.838 mln; Prior was revised to 1.860 mln from 1.868 mln
  • Q2 Productivity-Rev. 2.5% (Briefing.com consensus 2.3%); Prior 2.3%, Q2 Unit Labor Costs-Rev. 0.4% (Briefing.com consensus 0.9%); Prior 0.9%
  • August S&P Global US Services PMI – Final 55.7; Prior 55.0
  • August ISM Non-Manufacturing Index 51.5% (Briefing.com consensus 51.0%); Prior 51.4%
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