Market Remarks

Morning Notes – Wednesday March 17, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down day with a good chance of sideways move from pre-open levels around 3940.00 – watch for a break above 3955.50 for a change of sentiments
  • Key economic data report due during the day:
    • Building Permits (1.68M vs. 1.74M est.; prev. 1.88M) at 8:30 AM
    • Housing Starts ( 1.42M vs. 156M est.; prev. 1.58M) at 8:30 AM
    • FOMC Statement and Funds Rate at 2:00 PM
    • FOMC Press Conference at 2:30 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3948.82, 3923.54, and 3915.21
  • Critical resistance levels for S&P 500 are 3972.79, 3981.04, and 3993.22
  • Key levels for E-mini futures: break above 3955.00, the high of 2:15 AM and break below 3935.00, the low of 8:00 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 3951.75 and the index closed at 3962.71 – a spread of about -11.00 points; futures closed at 3952.50 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were down by -13.75; Dow up by +23, and NASDAQ down by -152.75

Markets Around The World

  • Markets in the East closed mostly lower – Hong Kong and Singapore were up
  • European markets are mostly lower – Germany is up
  • 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 mixed
    • Precious metals are mixed
    • Industrial metals are higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.666%, up 25.1 basis points from two weeks ago;
    • 30-years is at 2.420%, up 20.4 basis points;
    • 2-years yield is at 0.153%, up 4.4 basis points;
    • The 10-Year-&-2-Year spread is at 1.513, up from 1.306
  • VIX
    • At 20.68 @ 8:00 AM; up from the last close; at/below 5-day SMA;
    • Recent high =  31.90 on March 4; low =  19.33 on March 16
    • Sentiment: Risk-Off-to-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 red spinning top candle 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 crossing below %D; above 90
    • RSI-9 above 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Drifted sideways to down since 10:00 AM on Tuesday from all-time high of 3970.75; sequence of upper highs and upper lows since March 4
    • RSI-21 below 40 after making a Bearish Divergence on Tuesday
  • Below EMA20 but at/above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Broke below a Descending Triangle at 7:15 AM; 61.8% extension target is near 3925.00 and 100% extension target is near 3915.00 and a swing-low support at 3913.00
      • RSI-21 just below 40
      • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 6:45 AM after a sideways move;
  • The Bollinger Band is expanding since 6:45 AM with price walking down the lower band
    • Stochastic (9, 1, 3): %K is crisscrossing %D below 20
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly lower on Tuesday, March 16 in mostly higher volume. NASDAQ Composite closed higher and Dow Jones Transportation Average traded in lower volume. Major indices are near 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 three S&P sectors – Consumer Staples, Technology, and Utilities – closed higher. Real Estate was unchanged.

From Briefing.com:

The major indices closed mixed on Tuesday, as cyclical/value/small-cap stocks succumbed to profit-taking interest and growth/technology stocks showed relative outperformance. The S&P 500 shed 0.2% after starting the day at incremental new highs, but it struggled to attract follow-through from buyers ahead of the FOMC’s policy statement tomorrow.

The Nasdaq Composite increased 0.1% after being up as much as 1.2% intraday. The Dow Jones Industrial Average declined 0.4% and snapped a seven-session winning streak. The Russell 2000 underperformed with a 1.7% decline.

Seven S&P 500 sectors closed lower while four closed higher. The cyclically-oriented energy (-2.9%), industrials (-1.4%), financials (-1.1%), consumer discretionary (-0.9%), and materials (-0.9%) sectors lagged throughout the day. The information technology (+0.8%) and communication services (+0.9%) sectors, however, provided influential support.

[…]

The 10-yr yield ultimately settled one basis point higher at 1.62%. The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index was little changed at 91.87. WTI crude futures declined 0.9%, or $0.59, to $64.81/bbl.

[…]
  • Total retail sales declined 3.0% m/m in February (Briefing.com consensus -0.6%) and retail sales, excluding autos, declined 2.7% (Briefing.com consensus +0.2%). However, there were large upward revisions to January sales, with total sales increasing 7.6% (from 5.3%) and sales, excluding autos, surging 8.3% (from 5.9%).
  • […]
  • Total industrial production decreased 2.2% m/m in February (Briefing.com consensus +0.5%) following an upwardly revised 1.1% increase (from 0.9%) in January. The capacity utilization rate dropped to 73.8% (Briefing.com consensus 75.6%) from a downwardly revised 75.5% (from 75.6%) in January.
  • […]
  • The NAHB Housing Market Index decreased to 82 in March (Briefing.com consensus 84.0) from 84.0 in February.
  • Business inventories increased 0.3% in January (Briefing.com consensus 0.3%) following a revised 0.8% increase (from 0.6%) in December.
  • Import prices increased 1.3% in February while import prices excluding oil increased 0.4%. Export prices increased 1.6% in February while export prices excluding agriculture increased 1.5%.
[…]
  • Russell 2000 +17.5% YTD
  • Dow Jones Industrial Average +7.3% YTD
  • S&P 500 +5.5% YTD
  • Nasdaq Composite +4.5% YTD
Exit mobile version