Market Remarks

Morning Notes – Friday, September 27, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Moving up since 4:00 AM. Up more than 20 points to around 5814.00 level.
  • Odds are for an up day with a good chance of a sideways to down move from the pre-open levels. Watch for a break below 5790.75 for a change of sentiments.
  • The notable economic data due during the day:
    • Core PCE Price Index (0.1% vs, 0.2% est.; prev. 0.2%) at 8:30 AM.
    • Good Trade Balance (-94.3B vs. -100.6B est.; prev. -102.8B) at 8:30 AM,
    • Personal Income (0.2% vs.0.4% est.; prev.-0.3%) at 8:30 AM.
    • Personal Spending (0.2% vs. 0.3% est.; prev. 0.5%) at 8:30 AM.
    • Prelim Wholesale Inventories (0.2% vs. 0.2% est.; prev. 0.2%) at 8:30 AM.
    • Revised UoM Consumer Sentiment (69.3 est.; prev. 69.0) at 10:00 AM.
    • Revised UoM Inflation Expectations (prev. 2.7%) at 10:00 AM.
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 5721.01, 5712.06, and 5698.99.
  • Critical resistance levels for the S&P 500 are 5767.37, 5790.94, and 5814.52.
  • The key levels for E-mini futures are 5812.00, the high at 6:15 PM and 5790.75, the low at 4:00 AM.

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (December 2024) closed at 5803.00, and the index closed at 5745.37 – a spread of about +57.75 points; the futures closed at 5804.50; the fair value is -1.50.
  • Pre-NYSE session open, futures were higher – at 8:45AM, the S&P 500 futures were up by +11.50, Dow by +92, and NASDAQ by +38.75.

Markets Around the World

  • Markets in the East closed mixed – Singapore, Hong Kong, Tokyo, and Sydney closed up. Mumbai, Seoul, and Singapore closed down.
  • European markets 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 mixed.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.800, up +12.2 basis points from two weeks ago.
    • The 30-year is at 4.132%, up +14.2 basis points.
    • The 2-year yield is at 3.637%, down -1.3 basis points.
    • The 10-Year-&-2-Year spread is at 0.163, up from 0.028.
    • The 30-Year-&-10-Year spread is at 0.332, up from 0.312.
  • VIX
    • At 15.24 @ 8:15 AM; down from the last close; below the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.46 on August 19; Sentiment: Risk-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 red candle at all-time highs and after breaking above a cup-with-handle pattern. 
  • On September 19, the cash index broke above a resistance level, the high of August 30. The 61.8% extension target is around 5800.00, the 100% extension target is around 5900.00, and the 161.8% extension target is around 6053.00.
    • Stochastic (9, 1, 3): %K is below the %D and forming a potential Bearish Divergence.
    • RSI-9 is above 70, and 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 December futures achieved the 61.8% extension target around 5797.00 and are nearing the 100% extension target of around 5838.00. The 161.8% extension target is around 5905.00.
    • RSI-21 has risen above 60 after declining to below 40 from above 70.
    • Above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up
30-Minute (E-mini futures)
  • Breaking above a symmetrical triangle. The 61.8% extension target is around 5829.00, the 100% extension target is around 5842.00, and the 161.8% extension target is around 5864.00.
    • RSI-21 has risen above 60.
    • 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 sideways to up since 3:15 PM.
  • The Bollinger Band has been expanding since 7:30 AM with the price at the upper band.
  • Bias: Side-Up

Previous Session

Most major U.S. indices closed higher on Thursday, September 26 in mostly higher volume. NASDAQ Composite closed higher. Dow Jones Industrial Average traded in lower volume. The major indices opened higher but then declined in the morning before trading sideways for the rest of the day. Most closed below their opens. All but three S&P sectors – Energy, Utilities, and Healthcare – closed higher. The dollar index closed lower at 100.25. The energy futures closed down but the metals – precious and industrial – futures closed higher. Most of the soft commodities closed lower. The US treasury yields were mixed, and so were the bonds.

From Briefing.com

The S&P 500 set a new record high today, bolstered by leadership from the semiconductor stocks following Micron’s (MU 109.88, +14.11, +14.7%) better-than-expected earnings report and guidance, a tease from China that more policy stimulus is likely, and a reassuring initial jobless claims report.

[…]

The 2-yr note yield, at 3.53% before the 8:30 a.m. ET releases, settled at 3.62%, up seven basis points from yesterday’s settlement. The 10-yr note yield, at 3.75% before the releases, settled at 3.79%, up one basis point from yesterday’s settlement.

[…]

  • Nasdaq Composite: +21.2%
  • S&P 500: +20.5%
  • S&P Midcap 400: +12.0%
  • Dow Jones Industrial Average: +11.9%
  • Russell 2000: +9.1%

Reviewing today’s economic data:

  • Initial jobless claims for the week ending September 21 decreased by 4,000 to 218,000 (Briefing.com consensus 224,000). Continuing jobless claims for the week ending September 14 increased by 13,000 to 1.834 million.
  • Durable goods orders were flat month-over-month in August (Briefing.com consensus -2.9%) following an unrevised 9.9% increase in July. Excluding transportation, durable goods orders were up 0.5% month-over-month (Briefing.com consensus 0.1%) following an upwardly revised 0.1% decline (from -0.2%) in July.
  • The third estimate for Q2 GDP remained at 3.0% (Briefing.com consensus 3.0%). Similarly, the third estimate for the Q2 GDP Deflator remained at 2.5% (Briefing.com consensus 2.5%).
  • Pending home sales were up 0.6% in August (Briefing.com consensus 1.0%) versus -5.5% in July.
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