Market Remarks

Morning Notes – Monday, January 27, 2025

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Futures have been moving up since 7:15 AM within a trading range.
  • Odds are for a sideways to an up day. Watch for a break above 6092.00 or a break below 6074.25 for clarity.
  • The notable economic data due during the day:
    • ECB Main Refinancing Rate (2.90% vs 2.90% est.; prev. 3.15%) at 8:15 AM.
    • ECB Monetary Policy Statement at 8:15 AM.
    • Advance GDP (2.3% vs. 2.7% est.; prev. 3.1%) at 8:30 AM.
    • Unemployment Claims (207K vs. 224K est.; prev. 223K) at 8:30 AM.
    • Advance GDP Price Index (2.2% vs. 2.5% est.; prev. 1.9%) at 8:30 AM
    • ECB Press Conference at 8:45 AM.
    • Pending Home Sale (0.0% est.; prev. 2.0%) at 10:00 AM
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Down-Side
  • 30-Min: Up-Side
  • 15-Min: Side-Down
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 6028.42, 6012.96, and 5979.53.
  • Critical resistance levels for the S&P 500 are 6062.83, 6074.54, and 6089.71.
  • The key levels for E-mini futures are 6092.00, the high at 6:15 AM, and 6074.25, the low at 7:15 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (March 2025) closed at 6068.25, and the index closed at 6039.31 – a spread of about +29.00 points; the futures closed at 6067.50; the fair value is +0.75.
  • Pre-NYSE session open, futures were mixed – at 9:00 AM, the S&P 500 futures were up by +18.25, Dow down by -72 and NASDAQ up by +126.50.

Markets Around the World

  • Markets in the East closed higher – Shanghai, Hong Koing, Seoul and Singapore were closed.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • Precious metals are mixed.
    • Industrial metals are mixed.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.544, down -11.3 basis points from two weeks ago.
    • The 30-year is at 4.780%, down -9.5 basis points.
    • The 2-year yield is at 4.222%, down -4.4 basis points.
    • The 10-Year-&-2-Year spread is at 0.322, up from 0.391.
    • The 30-Year-&-10-Year spread is at 0.236, down from 0.218.
  • VIX
    • At 15.93 @ 9:00 AM; down from the last close; below the 5-day SMA
    • Recent high = 22.04 on January 13; low = 14.27 on December 24; Sentiment: Risk-Neutral

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

Weekly:
  • The week ending on January 24 made all-time closing and intraday highs – just above the highs of the week of December 2, 2024, but with a lower RSI reading.
    • Stochastic (9,1, 3): %K is above %D. Potential Bearish Divergence.
    • RSI-9 is above 60. Potential Bearish Divergence.
  • The week was up +104.58 or 1.7%; the 5-week ATR is 174.98.
  • Third up week in the last five weeks and sixth in the previous ten weeks
  • The weekly pivot point=6078.77; R1=6150.65, 6200.07; S1=6029.35, S2=5957.47; R1 pivot level was breached
  • Above 10-week EMA; 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A red Harami candle with a small upper shadow and a long lower shadow, just below the lower bound of Monday’s down gap.
    • Stochastic (9, 1, 3): %K is below %D, and falling.
    • RSI-9 has turned down to below 55 and is below the 8-day EMA.
  • Above 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA.
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 4:00 AM on Monday from a support within an up-sloping regression channel. Finding resistance at the middle of the channel.
    • RSI-9 has fallen below 50.
    • At/below EMA20, which is at/above EMA10 of EMA50.
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Drifting down since 3:30 AM, within what has essentially been a sideway move since 10:00 AM on Tuesday.
    • RSI-21 is just below 50.
    • At/below EMA10 of EMA50, which is at/below EMA 20.
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways to down since 11:45 PM.
  • The Bollinger Band has been expanding since 6:45 AM with the price bouncing up from the lower band to the middle band.
  • Bias: Side-Down

Previous Session

Major U.S. indices closed lower on Wednesday, January 29 in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in lower volume. The major indices opened lower and then traded lower until FOMC press conference at 2:30 PM, when they recovered the ground lost earlier.

The dollar index was up; energy futures were mixed; the precious metals were up and so were the industrial metals. The soft commodities were mostly up. The US Treasury yields closed mixed, and so did the bonds. The 30-year bond yields advanced and shorter duration fell.

From Briefing.com

The stock market had a somewhat mixed showing today. There was not a lot of conviction on either side of the tape in the early going as participants waited on the FOMC policy decision at 2:00 ET, followed by Fed Chair Powell’s press conference at 2:30 ET. 

The FOMC voted unanimously to leave the target range for the fed funds rate unchanged at 4.25-4.50%, which was widely expected by the market. The language of the directive changed to exclude the line that “Inflation has made progress toward the Committee’s 2 percent objective…” Instead, the January directive said that “Inflation remains somewhat elevated.”

[…]

The S&P 500 closed 0.5% lower, the Nasdaq Composite declined 0.5%, and the Dow Jones Industrial Average logged a 0.3% decline. The 2-yr note yield, which is most sensitive to changes in the fed funds rate, settled two basis points higher at 4.23% and the 10-yr yield was unchanged at 4.56%.

  • Dow Jones Industrial Average: +5.1.% YTD
  • S&P Midcap 400: +3.5% YTD
  • S&P 500: +2.7% YTD
  • Russell 2000: +2.4% YTD
  • Nasdaq Composite: +1.7% YTD
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