Market Remarks

Morning Notes – Wednesday March 10, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are little changed;
  • The daily bias is sideways to down
  • The odds are for a sideways to down day – watch for a break above 3883.25 and below 3865.25 for clarity
  • Key economic data report due during the day:
    • CPI ( 0.4% vs. 0.4% est.; prev. 0.3% ) at 8:30 AM;
    • Core CPI ( 0.1% vs. 0.2% est.; prev. 0.0%) at 8:30 AM
    • 10-yr Bond Auction at 1:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3857.69, 3851.93, and 3846.81
  • Critical resistance levels for S&P 500 are 3894.80, 3903.72, 3914.50
  • Key levels for E-mini futures: break above 3883.25, the high of 5:15 AM and break below 3865.25, the low of 6:15 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2021) closed at 3873.00 and the index closed at 3875.44 – a spread of about -2.50 points; futures closed at 3873.25 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are mixed – at 7:30 AM, S&P 500 futures were up by +5.00; Dow up by +120, and NASDAQ down by -16.75

Markets Around The World

  • Markets in the East closed mixed
  • European markets are mixed
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.546%, up 18.4 basis points from two weeks ago;
    • 30-years is at 2.259%, up 5.9 basis points;
    • 2-years yield is at 0.165%, up 4.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.381, up from 1.245
  • VIX
    • At 23.81 @ 6:30 AM; down from the last close; below 5-day SMA;
    • Recent high =  31.90 on March 4; low =  19.69 on February 10
    • Sentiment: Risk-On

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 March 5 was a Doji Harami candle
    • Stochastic (9,1, 3): %K is below %D but turning up
    • RSI (9) is near 60
  • The week was up +30.79 or +0.8%; the 5-week ATR is 125.66
  • An up week; third in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=3826.59, R1=3929.85, R2=4017.75; S1=3738.69, S2=3635.43; S1/R1 pivot levels were breached
  • At/above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle with almost no lower shadow and an upper shadow almost equal to the real body; facing resistance at 3914.50, the high of March 1
    • 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 above %D moving higher;
    • RSI-9 above 50;
  • At/above 20-day EMA; above 50-day EMA, 100-day, and 200-day SMA
  • In Correction
2-Hour (E-mini futures)
  • Moving up since 12:00 PM on March 4; broke the sequence of lower highs and lower lows since making the all-time high on February 15; below the downtrend line from the all-time high;
    • RSI-21 declined from near 75; drifting sideways to down below 60 since 2:00 PM Tuesday
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
    • Moving up since 2:00 PM on Friday in large swings; moving sideways to up since 4:00 PM on Tuesday
      • RSI-21 moving around 50
      • At/above EMA20, which is at/above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 9:45 PM;
  • The Bollinger Band is slightly shrinking but stable
    • Stochastic (9, 1, 3): %K is above %D
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Tuesday, March 9 in lower volume. Indices opened higher and then traded higher fr most of the day before giving some of the gains in the last hour of trading. Indices are near all-time highs and moving sideways to down for the past few days.

From Briefing.com:

The S&P 500 advanced 1.4% on Tuesday in a strong rebound session for the mega-cap/growth stocks, which boosted the Nasdaq Composite to a 3.7% gain. The Russell 2000 (+1.9%) finished in the middle with a 1.9% gain, while the Dow Jones Industrial Average increased just 0.1% after it was up as much as 1.1% intraday and at fresh record highs. […]

The red-hot energy (-1.9%) and financials (-0.9%) sectors underperformed in negative territory. Energy stocks were pressured by lower oil prices ($64.02, -1.02, -1.6%), while financial stocks were slowed down by a decline in longer-dated Treasury yields.

The 10-yr yield decreased five basis points to 1.55%, while the 2-yr yield increased one basis point to 0.16%. The U.S. Dollar Index decreased 0.4% to 91.97. On a related note, the $58 bln 3-year note auction was a nonevent, which was viewed in a positive light because the results revealed little concern about demand. Long-term interest rates ticked lower in response.

[…]
  • Russell 2000 +13.7% YTD
  • Dow Jones Industrial Average +4.0% YTD
  • S&P 500 +3.2% YTD
  • Nasdaq Composite +1.4% YTD
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