Market Remarks

Morning Notes – Wednesday February 17, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a sideways to a down day – watch for a break above 3936.75 and break below 3913.00 for clarity
  • Key economic data report due during the day:
    • Retail Sales ( 5.3% vs.1.1% est.; prev. -0.7%) at 8:30 AM
    • Core Retail Sales ( 5.9% vs. 1.1% est.; prev. -1.4%) at 8:30 AM
    • PPI ( 1.3% vs. 0.4% est.; prev. 0.3%) at 8:30 AM
    • Core PPI ( 1.2% vs. 0.2% est.; prev. 0.1%) at 8:30 AM
    • Capacity Utilization Rate ( 74.9% est.; prev. 74.5%) at 9:15 AM
    • Industrial Production ( 0.4% est.; prev. 1.6% ) at 9:15 AM
    • Business Inventories ( 0.5% est.; prev. 0.5% ) at 10:00 AM
    • NAHB Housing Market Index ( 83 est.; prev. 83) at 10:00 AM

Directional Bias Before Open:

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Up-Side
  • 15-Min: Down-Side
  • 6-Min:  Down-Side

Key Levels:

  • Critical support levels for S&P 500 are 3923.85, 3914.02, and 3905.78
  • Critical resistance levels for S&P 500 are 3940.88, 3950.06, and 3962.20
  • Key levels for E-mini futures: break above 3932.25, the high of 1:30 AM and break below 3916.50, the low of 3:00 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2021) closed at 3927.25 and the index closed at 3932.59 – a spread of about -5.25 points; futures closed at 3927.75 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures are down – at 8:15 AM, S&P 500 futures were down by -1.50; Dow by -3, and NASDAQ by -50.75

Markets Around The World

  • Markets in the East closed mostly lower – Hong Kong closed up; Shanghai was closed
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • INR/USD
    • EUR/USD
    • USD/CHF
    • NZD/USD
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.299%, up 19.4 BP from two weeks ago;
    • 30-years is at 2.090%, up 21.3 BP;
    • 2-years yield is at 0.125%, up 1.2 BP;
    • The 10-Year-&-2-Year spread is at 1.174, up from 0.992
  • VIX
    • At 21.49 @ 7:15 AM; up from the last close; at/above 5-day SMA;
    • Recent high =  37.51 on January 29; low =  19.69 on February 10
    • Sentiment: Risk-Off

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

Monthly
  • Confirmed Uptrend
  • December 2020 was a green candle with a small gap and with almost no upper and lower shadows; all-time closing and intraday highs;
    • Stochastic %K above %D near 100;
    • RSI-9 above 70; broke above a downtrend line from January 2018
    • Above the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
Weekly:
  • The week ending on February 12 was a relatively small green candle at the all-time highs with almost no upper and lower shadows;
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is near 70
  • The week was up +48.00 or +1.2%; the 5-week ATR is 115.53
  • An up week; third in the last five weeks and sixth in the last ten weeks
  • The weekly week pivot point=3919.00, R1=3953.06, R2=3971.29; S1=3900.77, S2=3866.71; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small Doji like candlestick with small lower and upper shadows and small real body
  • Broke above a symmetrical triangle at 3550.00 level on November 9; the 100% extension target near 3900.00 is achieved; 161.8% extension target is near 4140.00 levels
    • %K  is crossing below %D; above 90;
    • RSI-9 is near 70; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Drifting down from the all-time high of 3959.25 at 10:00 PM on Monday to around 3925.00; Moving up since 6:00 PM on January 31;
    • RSI-21 bouncing up since 6:00 PM after making a Bullish Divergence
  • At EMA10 of EMA50, which is at/below EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Moving sideways to up since 11:00 PM on Tuesday around 3925.00
      • RSI-21 is near 50 from near 25 and after making a Bullish Divergence at 8:00 PM
      • At/above EMA20, which is at/below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 11:30 PM;
  • The Bollinger Band is stable since 2:15 AM
    • Stochastic (9, 1, 3): %K is below %D;
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mixed on Tuesday, February 16 in higher volume. Dow Jones Industrial Average, Dow Jones Transportation Average, and NYSE Composite closed up. Most indices made small indecisive candlestick formations near all-time highs. All except Russell 2000 made all-time intraday highs. DJIA, DJTRAN, and NYA  closed at all-time highs too.

From Briefing.com:

The Dow Jones Industrial Average (+0.2%) eked out a closing record high on Tuesday amid strength in financial and energy stocks. The S&P 500 (-0.1%) and Nasdaq Composite (-0.3%) ended with modest losses after setting all-time highs in early action, while the Russell 2000 (-0.7%) underperformed. […]

The growth-sensitive 10-yr yield rose ten basis points to 1.30%, while the Fed-sensitive 2-yr yield increased two basis points to 0.12%. The U.S. Dollar Index increased 0.1% to 90.54.

This curve-steepening activity was a boon for the bank stocks within the S&P financials sector (+1.8%). The energy sector advanced the most, though, with a 2.3% gain amid higher oil ($60.09/bbl, +0.62, +1.0%) and gas ($3.13/MMBtu, +0.22, +7.2%) prices after a winter storm left millions of people without power in the U.S.

The communication services sector (+0.4%) also outperformed, as investors continued to bid up shares of companies with digital advertising exposure. Conversely, the utilities (-1.1%), real estate (-1.1%), and health care (-1.0%) sectors declined at least 1.0%.

[…]

Tuesday’s economic data was limited to the Empire State Manufacturing Survey, which increased to 12.1 in February (Briefing.com consensus 9.0) from 3.5 in January.

[…]
  • Russell 2000 +15.1% YTD
  • Nasdaq Composite +9.0% YTD
  • S&P 500 +4.7% YTD
  • Dow Jones Industrial Average +3.0% YTD
Exit mobile version