Market Remarks

Morning Notes – Tuesday, February 4, 2025

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM.
  • Up more than 30 points since 3:45 AM, making a rounding bottom.
  • Odds are for a sideways to a down day. Watch for a break above 6035.00 or a break below 5994.00 for clarity.
  • The notable economic data due during the day:
    • JOLTS Job Openings (8.01M est.; prev. 8.10M) at 10:00 AM.
    • Factory Orders (-0.7% est.; prev. -0.4%) at 10:00 AM.
  • Weekly: Uptrend
  • Daily: Uptrend Under Pressure
  • 120-Min: Down-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up-Side

Key Levels:

  • Critical support levels for the S&P 500 are 5981.63, 5969.65, and 5923.93.
  • Critical resistance levels for the S&P 500 are 622.13, 6051.97, and 6078.65.
  • The key levels for E-mini futures are 6035.00, the high at 11:30 PM, and 5994.00, the low at 3:45 AM.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (March 2025) closed at 6023.00, and the index closed at 5994.57 – a spread of about +28.50 points; the futures closed at 6022.25; the fair value is +0.75.
  • Pre-NYSE session open, futures were mixed – at 8:30 AM, the S&P 500 futures were up by +5.25, Dow down by -57 and NASDAQ up by +55.00.

Markets Around the World

  • Markets in the East closed mostly higher – Sydney and Singapore were down. Shanghai was closed.
  • European markets are mostly higher – the UK and Switzerland are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • GBP/USD
  • USD/CAD
  • USD/CHF
  • INR/USD
  • EUR/USD
  • USD/JPY
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • Precious metals are higher.
    • Industrial metals are mixed.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.564, down -1.8 basis points from two weeks ago.
    • The 30-year is at 4.796%, down -1.7 basis points.
    • The 2-year yield is at 4.265%, down -1.8 basis points.
    • The 10-Year-&-2-Year spread is at 0.299, unchanged from 0.299.
    • The 30-Year-&-10-Year spread is at 0.232, up from 0.231.
  • VIX
    • At 18.05 @ 8:15 AM; down from the last close; above the 5-day SMA
    • Recent high = 22.51 on January 27; low = 14.90 on January 31; Sentiment: Risk-Neutral-On

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

Weekly:
  • A tear-drop green candle closing near the lows of previous week, a sign of weakness.
    • Stochastic (9,1, 3): %K crossed below %D. Potential Bearish Divergence.
    • RSI-9 dipped below 60. Potential Bearish Divergence.
  • The week was down -60.71 or -1.0%; the 5-week ATR is 174.98.
  • Third down week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=6041.45; R1=6119.99, 6199.44; S1=5962.00, S2=5883.47; S1 pivot level was breached
  • Above 10-week EMA; 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A green candle with a long lower shadow and a small upper shadow, bouncing off a previous downtrend line, which acted as a support.
    • Stochastic (9, 1, 3): %K is below %D, and falling.
    • RSI-9 is below 50 and is below the 8-day EMA.
  • Below 20-day EMA; above 50-day EMA; above 100-day SMA and 200-day SMA.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Bounced up to the lower bound of an up-sloping regression channel after breaking below it on Monday.
    • RSI-9 is above 50.
    • At/above EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Moving up since 3:30 AM after a down move from the 6:00 PM high of 6069.00.
    • RSI-21 is just above 60.
    • Above EMA20, which is at/below EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways to up since 5:00 AM.
  • The Bollinger Band has been expanding since 5:00 AM.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed lower on Monday, February 3 in mostly lower volume. NASDAQ Composite traded in higher volume. The major indices gapped down at the open and made the day’s lows in the first hour of trading. The markets started to bounce around 10:30 AM and clawed back most of the losses by close but still did not close the morning gap.

The dollar index was up; energy futures and the precious metals were up. The industrial metals closed mostly down, and the soft commodities closed mostly up. The US Treasury advanced after declining earlier in the day. The S&P sectors closed mixed – five down and six up.

From Briefing.com

The week started with some turbulence in the stock market. The S&P 500 and Nasdaq Composite traded down as much as 1.9% and 2.5%, respectively, and the Dow Jones Industrial Average was more than 650 points lower at its worst level.

[…]

Treasuries settled mixed in response. The 10-yr yield settled three basis points lower at 4.54% and the 2-yr yield settled three basis points higher at 4.27%.

  • Dow Jones Industrial Average: +4.4% YTD
  • S&P Midcap 400: +2.5% YTD
  • Russell 2000: +1.3% YTD
  • S&P 500: +1.9% YTD
  • Nasdaq Composite: +0.4% YTD

Reviewing today’s economic data:

  • January S&P Global US Manufacturing PMI – Final 51.2; Prior 50.1
  • January ISM Manufacturing Index 50.9% (Briefing.com consensus 49.1%); Prior was revised to 49.2% from 49.3%
  • December Construction Spending 0.5% (Briefing.com consensus 0.2%); Prior was revised to 0.2% from 0.0%
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