Morning Notes – Thursday, March 27, 2025

/ 4 days ago March 27, 2025

Directional Bias for the Day:

  • S&P Futures are lower. Moving within a descending triangle.
  • Odds are for a down day with elevated volatility. Watch for a break above 5761.00 for a change of sentiment.
  • The notable economic data due during the day:
    • Unemployment Claims (224K vs. 225K est.; prev. 225K) at 8:30 AM.
    • Final GDP (2.3% vs. 2.4% est.; prev. 2.4%) at 8:30 AM.
    • Good Trade Balance (-147.9B vs. -134.6B est.; prev. -155.6B) at 8:30 AM.
    • Prelim Wholesale Inventories (0.3% vs. 0.7% est.; prev. 0.8%) at 8:30 AM.
    • Pending Home Sales (0.9% est.; prev. -4.6%) at 10:00 AM.
  • Weekly: Correction
  • Daily: Correction
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5600.45, 5563.85, and 5509.26.
  • Critical resistance levels for the S&P 500 are 5627.70, 5654.53, and 5674.76.
  • The key levels for E-mini futures are 5689.50, the high at 8:45 AM, and 5657.50, the low at 3:30 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2025) closed at 5758.25, and the index closed at 5712.20 – a spread of about +46.00 points; the futures closed at 5759.50; the fair value is -1.25.
  • Pre-NYSE session open, futures were mixed – at 9:00 AM, the S&P 500 futures were down by -6.00, Dow up by +38 and NASDAQ down by -44.25.

Markets Around the World

  • Markets in the East closed mixed. Shanghai, Hong Kong, Mumbai, and Singapore closed up; Tokyo, Sydney, and Seoul closed down.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are mixed.
    • Soft commodities are mainly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.357, up +4.2 basis points from two weeks ago.
    • The 30-year is at 4.703%, up +7.0 basis points.
    • The 2-year yield is at 4.031%, up +4.0 basis points.
    • The 10-Year-&-2-Year spread is at 0.326 up from 0.324.
    • The 30-Year-&-10-Year spread is at 0.346, down from 0.318.
  • VIX
    • At 18.58 @ 9:00 AM; up from the last close; above the 5-day SMA.
    • Recent high = 29.57 on March 11; low = 17.67 on February 27.
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on March 21 was a relatively small green Spinning Top Harami candle.
    • Stochastic (9,1, 3): %K is below %D.
    • RSI-9 is just above 30.
  • The week was up +28.62 or +0.5%; the 5-week ATR is 117.57.
  • First up week in the last five weeks and fourth in the previous ten weeks
  • The weekly pivot point=5660.22; R1=5722.67, 5777.79; S1=5605.10, S2=55442.65; No pivot levels were breached
  • Below 10-week EMA; At/above 39-week SMA; above 89-week SMA
  • In Correction
Daily
  • A relatively large Bearish Engulfing red candle from a resistance level around 5773.00.
  • On March 3, the index broke below the lower bound of a trading range between 6128.00 and 5775.00–the 61.8% extension target around 5550.00 is achieved; the 100% extension target is around 5400.00.
    • Stochastic (9, 1, 3): %K crossed below %D.
    • RSI-9 dipped below 50 but above the 8-day EMA.
  • Below 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA.
  • In Correction
2-Hour (E-mini futures)
  • Declining since 10:00 AM on March 25. Forming an upsloping flag–a bearish chart pattern–since March 11 within a downtrend. A break below the lower bound will have a 61.8% extension target around 5250.;0 and the 100% extension target around 4980.00.
    • RSI-9 has advanced to above 40 from a low of 20 since the 12:00 PM on Wednesday.
    • Below EMA20, which is at/above EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Moving sideways since 8:00 PM on Wednesday after a small bounce from the sharp decline during the day.
    • RSI-21 is around 40.
    • At/above EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to down since 0:15 AM.
  • The Bollinger Band is relatively stable but expanded with the price near the lower band.
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mainly lower on Wednesday, March 26 in mainly higher volume. Dow Jones Transportation Average closed higher in higher volume. The European markets closed mainly up but the Asian markets closed lower. The US indices opened flat and then mostly traded down for the rest of the day.

The dollar index and the energy futures closed up; the metals – industrial and precious – closed mixed; and the soft commodities closed mainly lower. The US Treasuries yields were up, and the bonds were down. The S&P sectors closed mixed–six down and five down.

From Briefing.com

The equity market closed with losses in the major indices. The Dow Jones Industrial Average declined 0.3%, the S&P 500 dropped 1.1%, and the Nasdaq Composite fell 2.0%.

Today’s price action led the S&P 500 back below its 200-day moving average (5,756) and led the Dow Jones Industrial Average, which turned positive on the year in yesterday’s advance, back into the red for 2025. 

[…]

The PHLX Semiconductor Index (SOX) closed 3.3% lower than yesterday. The selling interest contributed to the underperformance of the S&P 500 information technology sector, which was the worst performers by a wide margin. The communication services (-2.0%) and consumer discretionary (-1.7%) sectors were the next worst performers.

The defensive-oriented consumer staples (+1.4%) and utilities (+0.7%) sectors were the top gainers, reflecting a more risk-off tone in today’s trade.

[…]

The 10-yr yield settled three basis points higher at 4.34% and the 2-yr yield settled one basis point higher at 4.01%.

[…]
  • Dow Jones Industrial Average: -0.2% YTD
  • S&P 500: -2.9% YTD
  • S&P Midcap 400: -4.2% YTD
  • Nasdaq Composite: -7.3% YTD
  • Russell 2000: -7.0% YTD

Reviewing today’s economic data:

  • Weekly MBA Mortgage Applications Index -2.0%; Prior -6.2%
  • February Durable Orders 0.9% (Briefing.com consensus -1.2%); Prior was revised to 3.3% from 3.1%, February Durable Goods – ex transportation 0.7% (Briefing.com consensus 0.1%); Prior was revised to 0.1% from 0.0%
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