Market Remarks

Morning Notes – Monday March 15, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up to sideways move – watch for a break above 3924.25 for a change of sentiments
  • Key economic data report due during the day:
    • Empire State Manufacturing Index (17.4 vs. 14.6 est.; prev. 12.1) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3937.36, 3925.57, and 3915.21
  • Critical resistance levels for S&P 500 are 3955.63, 3960.27, and 3963.29
  • Key levels for E-mini futures: break above 3947.75, the low of 5:45 AM and break below 3924.25, the low of 3:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 3933.75 and the index closed at 3943.35 – a spread of about -9.50 points; futures closed at 3932.75 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +1.50; Dow by +82, and NASDAQ by +16.75

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai, Mumbai, and Seoul were down
  • European markets are higher
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly down
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.616%, up 15.6 basis points from two weeks ago;
    • 30-years is at 2.371%, up 18.9 basis points;
    • 2-years yield is at 0.149%, up 2.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.469, up from 1.339
  • VIX
    • At 21.46 @ 8:00 AM; up from the last close; below 5-day SMA;
    • Recent high =  31.90 on March 4; low =  21.45 on March 11
    • Sentiment: Risk-On-Neutral

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 12 was a large green candle with small lower and upper shadows at all-time highs
    • Stochastic (9,1, 3): %K is above %D above 90
    • RSI (9) is above 65
  • The week was up +101.40 or +2.6%; the 5-week ATR is 117.80
  • An up week; third in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=3907.62, R1=3955.99, R2=4048.64; S1=3854.97, S2=3766.60; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively small green candle with small lower and upper shadow; at all-time highs
    • 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; above 80
    • RSI-9 above 60;
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Drifted up from 3900.75 at 4:00 AM on Friday to near 3958.50, the high on Thursday; sequence of upper highs and upper lows since March 4
    • RSI-21 declined from near 50
  • At/below EMA20 but above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Drifting sideways since 10:00 PM on March 11 between 3960.00 and 3900.00
      • RSI-21 just above 45
      • At/above EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 9:30 PM;
  • The Bollinger Band is stable but relatively expanded
    • Stochastic (9, 1, 3): %K is crisscrossing %D
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, March 12 in mixed volume. NASDAQ Composite closed lower. Dow Jones Transportation Average and NASDAQ Composite traded in higher volume. Most indices made all-time highs. NASDAQ Composite and Wilshire 5000 Total Market Index did not. S&P 500 closed at an all-time high. NASDAQ Composite continues to show the most weakness. All but one S&P sectors – Technology – closed higher.

For the week, the US indices closed higher in lower volume. Markets in Asia mostly closed up and markets in Europe closed higher. The dollar index closed down, energy futures were down but precious and industrial metals were up. Soft commodities were mostly down. The US Treasury yields were up for the week.

From Briefing.com:

The S&P 500 (+0.1%) eked out a closing record high on Friday, coming back from an early 0.6% decline as it gradually absorbed another sharp rise in long-term interest rates. The 10-yr yield rose 11 basis points to 1.64% to reach its highest level since last February.

The Dow Jones Industrial Average (+0.9%) and Russell 2000 (+0.6%) set intraday and closing record highs, while the Nasdaq Composite declined 0.6% amid relative weakness in the mega-cap/growth stocks. To the Nasdaq’s credit, it was down as much as 1.8% intraday due to the initial shock of higher rates.

[…]

The 2-yr yield increased one basis point to 0.14%. The U.S. Dollar Index increased 0.2% to 91.63. WTI crude futures rose 0.7%, or $0.43, to $65.59/bbl.

[…]
  • The Producer Price Index for final demand increased 0.5% m/m in February, as expected, following a 1.3% increase in January. In turn, the Producer Price Index for final demand, less foods and energy, rose 0.2% m/m, as expected, following a 1.2% increase in January. On a year-over-year basis, the Producer Price Index for final demand was up 2.8%, versus 1.7% in January. The Producer Price Index for final demand, less foods and energy, was up 2.5% versus 2.0% in January.
  • […]
  • The preliminary University of Michigan Index of Consumer Sentiment for March increased to 83.0 (Briefing.com consensus 80.0) from the final reading of 76.8 for February. The March reading is the highest since August 2020.
[…]
  • Russell 2000 +19.1% YTD
  • Dow Jones Industrial Average +7.1% YTD
  • S&P 500 +5.0% YTD
  • Nasdaq Composite +3.4% YTD
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