Market Remarks

Morning Notes – Friday, December 20, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM. They have been trending down since 9:30 AM on Thursday and have declined more than 140 points. However, they have been bouncing since 7:00 AM, gaining more than 40 points.
  • Odds are for a down day with a good chance of sideways to an up move from the pre-open level around 5900.00. Watch for a break below 5866.00 for clarity.
  • The notable economic data due during the day:
    • Core PCE (0.1% vs. 0.2% est.; prev. 0.3%) at 8:30 AM.
    • Personal Income (0.3% vs. 0.4% est.; prev. 0.7%) at 8:30 AM.
    • Personal Spending (0.4% vs. 0.5% est.; prev. 0.3%) at 8:30 AM.
    • Revised UoM Consumer Sentiment (74.1 est.; prev. 74.0) at 10:00 AM.
    • Revised UoM Inflation Expectations (prev. 0.3%) at 10:00 AM.
  • Weekly: Uptrend
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Down
  • 15-Min: Down
  • 6-Min: Down

Key Levels:

  • Critical support levels for the S&P 500 are 5811.69, 5799.98, and 5784.92.
  • Critical resistance levels for the S&P 500 are 5866.07, 5897.51, and 5918.25.
  • The key levels for E-mini futures are 5927.75, the high at 2:00 PM on Thursday and 5866.00, the low at 7:15 AM.

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (March 2025) closed at 5934.25, and the index closed at 5867.08 – a spread of about +66.25 points; the futures closed at 5934.00; the fair value is +0.25.
  • Pre-NYSE session open, futures were lower – at 9:00 AM, the S&P 500 futures were down by -34.75, Dow by -160, and NASDAQ by -172.75.

Markets Around the World

  • Markets in the East closed lower.
  • European markets are lower.
  • 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 lower.
    • Industrial metals are lower.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.576, up +40.1 basis points from two weeks ago.
    • The 30-year is at 4.739%, up +39.7 basis points.
    • The 2-year yield is at 4.880%, up +73.0 basis points.
    • The 10-Year-&-2-Year spread is at 0.245, up from 0.025.
    • The 30-Year-&-10-Year spread is at 0.163, down from 0.167.
  • VIX
    • At 23.635 @ 9:00 AM; down from the last close; above the 5-day SMA
    • Recent high = 28.32 on December 18; low = 12.89 on December 4; Sentiment: Risk-Off

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

Weekly:
  • The week ending on December 13 was a relatively small red Harami spinning top candle near all-time highs.
    • Stochastic (9,1, 3): %K crossed below %D.
    • RSI-9 is above 65. Potential Bearish Divergence.
  • The week was down -39.18 or -0.6%; the 5-week ATR is 98.49.
  • Second week in the last five weeks and fourth in the previous ten weeks
  • The weekly pivot point=6057.86 R1=6085.82, R2=6120.56; S1=6023.12, S2=5995.16; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A large red candle with almost lower shadow and a small upper shadow, at the close of previous day.
    • Stochastic (9, 1, 3): %K is below %D and near zero.
    • RSI-9 is below 30 and 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)
  • Bouncing up after breaking below a support level around 5855.00.
    • RSI-9 is just below 40 after making a Bullish Divergence.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Down
30-Minute (E-mini futures)
  • Trending down since 9:30 AM on Thursday.
    • RSI-21 is just above 40 after making a Bullish Divergence.
    • At/above EMA 20, but below EMA10 of EMA50.
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting down since 5:15 AM.
  • The Bollinger Band has been contracting.
  • Bias: Down

Previous Session

Major U.S. indices closed mostly lower on Thursday, December 19 in lower volume. Dow Jones Industrial Average eked out a gain. Major indices were higher until 2:00 PM when they turned down and traded lower for the rest of the day.

The dollar index was up’ energy futures were mixed; metals were down; and most soft commodities closed down. The US Treasury yields was up, and the bonds closed down. All but three S&P sectors – Financials, Technology, and Utilities – closed down.

From Briefing.com

Ultimately, the S&P 500 and Nasdaq Composite each settled 0.1% lower than yesterday. The deterioration was related to rising rates and rollover action in mega cap names. The 10-yr yield jumped another eight basis points today to 4.57% following a batch of economic data (initial jobless claims, third estimate for Q3 GDP, existing home sales, and leading indicators) that was better than expected.

[…]
  • Nasdaq Composite: +29.1% YTD
  • S&P 500: +23.0% YTD
  • Dow Jones Industrial Average: +12.3% YTD
  • S&P Midcap 400: +11.7% YTD
  • Russell 2000: +9.6% YTD

Reviewing today’s economic data:

  • Weekly Initial Claims 220K (Briefing.com consensus 237K); Prior 242K, Weekly Continuing Claims 1.874 mln; Prior was revised to 1879 mln from 1.886 mln
  • Q3 GDP – Third Estimate 3.1% (Briefing.com consensus 2.8%); Prior 2.8%, Q3 GDP Deflator – Third Estimate 1.9% (Briefing.com consensus 1.9%); Prior 1.9%
  • December Philadelphia Fed Index -16.4 (Briefing.com consensus 3.0); Prior -5.5
  • November Existing Home Sales 4.15 mln (Briefing.com consensus 4.10 mln); Prior 3.96 mln
  • November Leading Indicators 0.3% (Briefing.com consensus -0.1%); Prior -0.4%
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