Morning Notes – Friday March 19, 2021

/ March 19, 2021

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up to sideways day – watch for a break above 3925.00 and a break below 3900.00 for clarity
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3910.86, 3894.30, and 3873.94
  • Critical resistance levels for S&P 500 are 3931.75, 3943.37, and 3963.47
  • Key levels for E-mini futures: break above 3923.50, the high of 4:30 AM and break below 3898.50, the low of 2:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2021) closed at 3906.00 and the index closed at 3915.46 – a spread of about -9.50 points; futures closed at 3906.00 for the day; the fair value is +0.00
  • Pre-NYSE session open, futures are higher – at 7:45 AM, S&P 500 futures were up by +8.00; Dow by +10, and NASDAQ by +74.50

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai was up
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.730%, up 18.0 basis points from two weeks ago;
    • 30-years is at 2.476%, up 16.7 basis points;
    • 2-years yield is at 0.149%, unchanged;
    • The 10-Year-&-2-Year spread is at 1.573, up from 1.409
  • VIX
    • At 21.32 @ 7:45 AM; down from the last close; above 5-day SMA;
    • Recent high =  31.90 on March 4; low =  18.95 on March 18
    • Sentiment: Risk-Neutral-to-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 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 red candle  near all-time highs with small upper shadow and almost no lower shadow;
    • 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 below %D; below 60
    • RSI-9 near 50; below 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Declining since 8:00 PM on Wednesday from the all-time high of 3978.50; broke the sequence of upper highs and upper lows since March 4; at a support level around 3900.00
    • RSI-21 bouncing from below 30 to just above 40
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
    • Bouncing off the lows around 3900.00 from a support to a resistance level around 3925.00
      • RSI-21 just below 50
      • At/above EMA20 but below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 9:00 PM;
  • The Bollinger Band is expanding a bit since 2:15 AM with price first getting up to the upper band and then declining to the lower band
    • Stochastic (9, 1, 3): %K is crisscrossing %D around 30
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Thursday, March 18 in higher volume. Major indices opened lower but then moved higher till mid-day before giving up the ghost and declining sharply till the close. All but one S&P sectors – Financials – closed lower.

From Briefing.com:

The S&P 500 fell 1.5% on Thursday, as another spike in the 10-yr yield (1.73%) continued to undercut the heavily-weighted growth stocks, whose losses took a toll on risk sentiment. The Nasdaq Composite (-3.0%) and Russell 2000 (-2.9%) dropped around 3.0%. The Dow Jones Industrial Average decreased just 0.5% after setting an all-time high during the day.

[…]

Ten of the 11 S&P 500 sectors closed in negative territory, with the information technology (-2.9%), consumer discretionary (-2.6%), and communication services (-2.0%) sectors as influential laggards. The energy sector (-4.7%) declined the most, though, as oil prices ($60.00/bbl, -$4.61, -7.1%) pulled back 7% alongside other risk assets.

[…]
  • Initial jobless claims for the week ending March 13 increased by 45,000 to 770,000 (Briefing.com consensus 710,000) while continuing claims for the week ending March 6 decreased by 18,000 to 4.124 million.
  • […]
  • The Conference Board’s Leading Economic Index (LEI) increased 0.2% m/m in February (Briefing.com consensus 0.3%) following an unrevised 0.5% increase in January. February marked the tenth consecutive monthly increase.
  • […]
  • The Philadelphia Fed Index soared to 51.8 in March (Briefing.com consensus 23.5) from 23.1 in February.
[…]
  • Russell 2000 +14.8% YTD
  • Dow Jones Industrial Average +7.4% YTD
  • S&P 500 +4.2% YTD
  • Nasdaq Composite +1.8% YTD
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