Market Remarks

Morning Notes – Wednesday, September 18, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are up at 8:15 AM. Moving sideways between 5711.00 and 5698.25 since 4:00 PM on Tuesday.
  • Awaiting the FOMC decision and the press conference later in the afternoon.
  • Odds are for a sideways day until the Fed event. Elevated volatility after the event.
  • The economic data due during the day:
    • Building Permits (1.41M est.; prev. 1.40M) at 8:30 AM.
    • Housing Starts (1.32M est.; prev. 1.24M) at 8:30 AM.
    • Federal Funds Rate (5.25% est.; prev. 5.5%) at 2:00 PM.
    • FOMC Statement at 2:00 PM.
    • FOMC Economic Projections at 2:00 PM.
    • FOMC Press Conference at 2:30 PM.
  • Weekly: Uptrend
  • Daily: Uptrend Resumed
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 5614.05, 5604.53, and 5588.49.
  • Critical resistance levels for the S&P 500 are 5642.06, 5657.98, and 5670.81.
  • The key levels for E-mini futures are 5711.00, the high at 2:15 AM and 5698.25, the low at 4:15 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2024) closed at 5702.00, and the index closed at 5634.58 – a spread of about +67.50 points; the futures closed at 5700.25; the fair value is -1.75.
  • Pre-NYSE session open, futures were higher – at 8:00 AM, the S&P 500 futures were up by +4.75, Dow by +37, and NASDAQ by +30.00.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Tokyo, and Sydney closed up; Mumbai and Singapore closed down; Seoul was closed.
  • European markets are mostly lower – Germany and Italy are up.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • USD/CAD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • NZD/USD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.659, down -17.7 basis points from two 5weeks ago.
    • The 30-year is at 3.961%, down -16.4 basis points.
    • The 2-year yield is at 3.615%, down -25.8 basis points.
    • The 10-Year-&-2-Year spread is at 0.044, up from -0.037.
    • The 30-Year-&-10-Year spread is at 0.302, up from 0.289.
  • VIX
    • At 17.65 @ 7:15 AM; up from the last close; below the 5-day SMA
    • Recent high = 23.76 on September 6; 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 September 13 was a large green candle with almost no upper and lower shadows reversing previous week’s decline. The index is -0.8% below its all-time high of 5669.67.
    • Stochastic (9,1, 3): %K crossed above %D.
    • RSI-9 is just below 50.
  • The week was down 217.60 or 4.0%; the 5-week ATR is 179.17.
  • Fourth up week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5556.42, R1=5705.87, R2=5785.73; S1=5476.56, S2=5327.11; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Resumed
Daily
  • A red spinning top candle at a resistance level – the high of August 30.
    • Stochastic (9, 1, 3): %K has crossed below the %D; above 90.
    • RSI-9 is just above 60 and above the 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA.
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Trending up since 10:00 AM on September 11. Moving sideways below the upper bound of a horizontal channel. A break above will have a 61.8% extension target around 5797.00, the 100% extension target around 5838.00, and the 161.8% extension target around 5905.00.
    • RSI-21 has declined to 50 from above 70.
    • At/above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving mostly sideways since 7:00 PM on Sunday.
    • RSI-21 is around 50.
    • At EMA20, which is at EMA10 of EMA50.
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 9:45 PM.
  • The Bollinger Band has been expanding since 3:30 AM with price moving from one band to other.
  • Bias: Side

Previous Session

Most major U.S. indices closed mostly higher on Tuesday, September 17 in higher volume. Dow Jones Industrial Average and NYSE Composite closed higher. The major indices gapped up at the open but lost steam after an hour of trading and traded down before moving sideways in the late afternoon. The S&P sectors were mixed as five closed up, five closed down, and Communications was unchanged.

The dollar index closed down at 100.57, the energy futures were mixed, the metals – precious and industrials – were down, and the soft commodities were mixed. The US Treasury yields closed up and the bonds closed down.

From Briefing.com

Today’s session started on an upbeat note, leading the S&P 500 and Dow Jones Industrial Average to new all-time intraday highs. Stocks faded from session highs, though, leaving the S&P 500 and DJIA near their flat lines at the close.

[…]

The 10-yr yield settled two basis points higher at 3.64% and the 2-yr yield settled three basis points higher at 3.59%. 

  • S&P 500: +18.1% YTD
  • Nasdaq Composite: +17.4% YTD
  • Dow Jones Industrial Average: +10.4% YTD
  • S&P Midcap 400: +10.4% YTD
  • Russell 2000: +8.8% YTD

Reviewing today’s economic data:

  • August Retail Sales 0.1% (Briefing.com consensus -0.2%); Prior was revised to 1.1% from 1.0%, August Retail Sales ex-auto 0.1% (Briefing.com consensus 0.2%); Prior 0.4%
  • August Industrial Production 0.8% (Briefing.com consensus 0.1%); Prior was revised to -0.9% from -0.6%, August Capacity Utilization 78.0% (Briefing.com consensus 77.9%); Prior was revised to 77.4% from 77.8%
  • July Business Inventories 0.4% (Briefing.com consensus 0.4%); Prior 0.3%
  • September NAHB Housing Market Index 41 (Briefing.com consensus 41); Prior 39
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