Market Remarks

Morning Notes – Wednesday, September 25, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are little changed at 8:15 AM. Moving up since 2:15 AM within a range. Up more than 15 points.
  • Odds are for a sideways to an up day. Watch for a break below 5773.50 or a break above 5794.50 for clarity.
  • The major economic data due during the day:
    • New Home Sales (699K est.; prev. 739K) at 10:00 AM
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for the S&P 500 are 5718.11, 5698.99, and 5684.37.
  • Critical resistance levels for the S&P 500 are 5733.57, 5745.84, and 5758.74.
  • The key levels for E-mini futures are 5794.50, the high at 7:00 PM and 5773.50, the low at 2:15 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2024) closed at 5793.00, and the index closed at 5732.93 – a spread of about +60.00 points; the futures closed at 5792.00; the fair value is +1.00.
  • Pre-NYSE session open, futures were a little lower – at 8:00 AM, the S&P 500 futures were down by -2.25, Dow by -2, and NASDAQ by -30.75.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Mumbai closed up. Tokyo, Sydney, and Seoul closed down.
  • European markets are mixed – Germany, France and Italy are lower. The UK., Spain, Switzerland, and STOXX 600 are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • Dollar index
  • USD/CHF
  • USD/JPY
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.733, up +8.3 basis points from two weeks ago.
    • The 30-year is at 4.086%, up +11.6 basis points.
    • The 2-year yield is at 3.519%, down -8.8 basis points.
    • The 10-Year-&-2-Year spread is at 0.214, up from 0.043.
    • The 30-Year-&-10-Year spread is at 0.353, up from 0.3200.
  • VIX
    • At 15.66 @ 8:00 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-On

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

Weekly:
  • The week ending on September 20 was a green candle with a small upper and almost no lower shadows at all-time highs.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is just below 65.
  • The week was down 76.53 or 1.4%; the 5-week ATR is 157.46.
  • Fourth up week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5680.22, R1=5755.90, R2=5809.26; S1=5626.86, S2=5551.18; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small candle with almost no upper shadow and a small lower shadow making another all-time high. Broke above a resistance level – the high of August 30 – with the 61.8% extension target around 5800.00, the 100% extension target around 5900.00, and the 161.8% extension target around 6053.00.
    • Stochastic (9, 1, 3): %K is above the %D and above 90.
    • RSI-9 has turned down below 70. It is 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)
  • Drifting higher since 10:00 AM on September 20. Trending up since September 11. Broke above the upper bound of a horizontal channel. The 61.8% extension target around 5797.00 has been achieved. The 100% extension target is around 5838.00, and the 161.8% extension target is around 5905.00.
    • RSI-21 is below 60.
    • At/above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up
30-Minute (E-mini futures)
  • Moving higher since 11:00 AM on September 20 from the low of a horizontal channel around 5733.50 to its upper bound around 5797.50.
    • RSI-21 has been moving around just above 50.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 5:30 AM.
  • The Bollinger Band has expanding since 6:00 AM with the price at the upper band.
  • Bias: Side-Up

Previous Session

Most major U.S. indices closed higher on Tuesday, September 24 in mostly higher volume. Dow Jones Industrial Average traded in lower volume. The day’s price action was muted, and most indices drifted higher within a narrow range. The S&P sectors closed mixed. The defensive sectors closed lower. The dollar index closed higher at 100.16. The energy futures closed mixed, the metals – precious and industrial – closed higher, and so did most of the soft commodities. The US treasury yields declined, and the bonds rose a little.

From Briefing.com

There might not have been a lot of buying conviction in today’s market, but more importantly there was no real selling conviction either.

[…]

Treasury yields also declined following a weaker-than-expected Consumer Confidence Report for September. The 2-yr note yield, at 3.59% just before the 10:00 a.m. ET release, settled today’s session at 3.55%, down three basis points from yesterday’s settlement. The 10-yr note yield, at 3.79% just before the release, finished unchanged at 3.74%. The Treasury market also digested a $69 billion 2-yr note action that saw the high yield match the when-issued yield of 3.52%.

  • Nasdaq Composite: +20.4% YTD
  • S&P 500: +20.2% YTD
  • S&P Midcap 400: +12.1% YTD
  • Dow Jones Industrial Average: +12.0% YTD

Reviewing today’s economic data:

  • July FHFA Housing Price Index (actual 0.1%; prior 0.0%)
  • July S&P Case-Shiller Home Price Index (actual 5.9%; Briefing.com consensus 6.0%; prior 6.5%).
  • The Conference Board’s Consumer Confidence Index fell to 98.7 in September (Briefing.com consensus 102.9) from an upwardly revised 105.6 (from 103.5) in August. September’s decline was the largest since August 2021.
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