Market Remarks

Morning Notes – Tuesday, October 8, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Moving sideways since 5:15 AM within a narrow range around 5765.00.
  • Odds are for a sideways to down day. Watch for a break above 5770.75 or a break below 5742.50 for clarity.
  • The notable economic data due during the day:
    • Trade Balance (-70.4B vs. -70.1B est.; prev. -78.9.0) at 8:30 AM.
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side-Up
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5686.85, 5677.37, and 5615.08,
  • Critical resistance levels for the S&P 500 are 5715.35, 5737.78, and 5735.21.
  • The key levels for E-mini futures are 5770.75, the high at 7:30 AM and 5742.50, the low at 3:15 AM.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (December 2024) closed at 5747.00, and the index closed at 5695.94 – a spread of about +51.00 points; the futures closed at 5744.75; the fair value is +2.25.
  • Pre-NYSE session open, futures were higher – at 9:00AM, the S&P 500 futures were up by +20.50, Dow by +55, and NASDAQ by +69.00.

Markets Around the World

  • Markets in the East closed mostly down – Mumbai was up.
  • European markets are mostly lower – Italy and Switzerland are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are mixed.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.033, up +28.2 basis points from two weeks ago.
    • The 30-year is at 4.309%, up +21.5 basis points.
    • The 2-year yield is at 4.004%, up +40.9 basis points.
    • The 10-Year-&-2-Year spread is at 0.029, down from 0.156.
    • The 30-Year-&-10-Year spread is at 0.276, down from 0.343.
  • VIX
    • At 21.99 @ 8:30 AM; down from the last close; above the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.90 on September 26; Sentiment: Risk-Neutral-to-On

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

Weekly:
  • The week ending on October 4 was another relatively small green Spinning Rop candle at all-time highs.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is above 65 and with a potential for a Bearish Divergence.
  • The week was up 12.90 or 0.2%; the 5-week ATR is 152.73.
  • Fourth up week in the last five weeks and seventh in the previous ten weeks
  • The weekly pivot point=5730.07, R1=5786.14, R2=5821.21; S1=5695.00, S2=5638.93; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A red candle with almost no upper shadow and a small lower shadow.
  • 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 crossed below the %D and is below 30.
    • RSI-9 turned down to just above 50 and is below the 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA.
  • Uptrend
2-Hour (E-mini futures)
  • Making lower higher and lower lows within a Horizontal Channel since 10:00 PM on September 18. 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 bounced up to around 55.
    • Above EMA20, but at EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Bounced up from a low of 5725.25 after the market’s close on Monday. Up more that40 points.
    • RSI-21 is around 55.
    • Above EMA20, which is at/below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 4:45 AM.
  • The Bollinger Band is contracting.
  • Bias: Side-Up

Previous Session

Most major U.S. indices closed lower Monday, October 7 in mixed volume. Dow Jones Industrial Average and S&P 500 traded in higher volume. The major indices opened lower and drifted lower before accelerating near the end. Most major indices have alternatively closed up and down for many days. 

All but one S&P sector – Energy – closed down. The dollar index closed higher at 102.30. The energy futures closed mixed but the metals – precious and industrial – futures closed down. The soft commodities closed mixed. The US treasury yields were up, and bonds down.

From Briefing.com

Today’s trade featured a negative bias through the entire session. The major indices were trading slightly lower for most of the day before selling picked up in the afternoon. The S&P 500 ultimately settled 1.0% lower, the Nasdaq Composite closed 1.2% below its prior close, the Dow Jones Industrial Average declined 0.9%, and the Russell 2000 settled with a 0.8% loss.

[…]

Rising market rates also contributed to the selling in equities. The 10-yr yield settled five basis points higher at 4.03% and the 2-yr yield settled seven basis points higher at 4.00%.

  • Nasdaq Composite: +19.4% YTD
  • S&P 500: +19.4% YTD
  • Dow Jones Industrial Average: +11.3% YTD
  • S&P Midcap 400: +11.3% YTD
  • Russell 2000: +8.2% YTD

Reviewing today’s economic data:

  • Consumer credit increased by $8.9 billion in August (Briefing.com consensus $12.7 billion) after increasing a revised $26.7 billion (from $25.5 billion) in July.
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