Market Remarks

Morning Notes – Monday March 29, 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 3945.00 – watch for a break below 3954.00 for a change in sentiments
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3943.17, 3917.63, and 3907.29
  • Critical resistance levels for S&P 500 are 3969.62, 3983.87, and 3996.11
  • Key levels for E-mini futures: break above 3954.00, the high of 7:00 AM; and break below 3935.25, the low 4:15 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 3963.00 and the index closed at 3974.54 – a spread of about -11.50 points; futures closed at 3964.75 for the day; the fair value is -1.75
  • Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -22.00; Dow by -189, and NASDAQ by -41.50

Markets Around The World

  • Markets in the East closed mostly higher – Sydney and Seoul were down and Mumbai was closed
  • European markets are mostly higher – The UK and Switzerland are down
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.650%, up +1.5 basis points from two weeks ago;
    • 30-years is at 2.350%, down -5.2 basis points;
    • 2-years yield is at 0.145%, down -0.4 basis points;
    • The 10-Year-&-2-Year spread is at 1.505, up from 1.486
  • VIX
    • At 19.92 @ 8:00 AM; up from the last close; at/below 5-day SMA;
    • Recent high =  23.90 on March 19; low =  18.87 on March 22
    • 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 26 was a green candle almost like a Bullish Engulfing pattern; at the all-time high close
    • Stochastic (9,1, 3): %K is crossing above %D
    • RSI (9) is above 65
  • The week was up +61.44 or +1.6%; the 5-week ATR is 138.62
  • An up week; third in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=3935.41, R1=4017.32, R2=4060.10; S1=3892.63, S2=3810.72; R1/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle with almost with shaved top and bottom 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 90
    • RSI-9 is above 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Broke above a down-sloping flag – 61.8% extension target is near 4002.00 and 100% extension target is hear 4100.00;
    • RSI-21 declined from above 80 to just below 60
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
    • Drifting down since 4:00 PM on Friday from 3968.00 to near 3940.00
      • RSI-21 above 50 from above 70
      • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting sideways since 12:30 AM
  • The Bollinger Band is relatively stable
    • Stochastic (9, 1, 3): %K is below %D above
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, March 26 in lower volume. Indices opened higher and then traded sideways till early afternoon before advancing again and closing near the day’s highs. All S&P sectors closed higher.

For the week, US indices closed mostly higher in mixed volume. NASDAQ Composite and Russell 2000 closed lower. Markets in Asia were mixed and most European markets closed higher. The dollar index continues to strengthen, energy futures were mixed and most other commodities were down. The US Treasury yields declined for the week.

From Briefing.com:

The S&P 500 increased 0.5% on Thursday amid cyclical leadership and technical support. The benchmark index briefly slipped below its 50-day moving average (3871) with an early 0.9% decline, but investors stepped in faithfully to buy the dip. The Nasdaq Composite (+0.1%) and Dow Jones Industrial Average (+0.6%) also reclaimed early losses and some.

The Russell 2000 rose 2.3% after finding support at the 2100 level, which represented an 8% decline in just over three sessions. Presumably, this was a short-term oversold condition that was primed for a bounce.

A pro-cyclical trade emerged during the day, as the industrials (+1.6%), financials (+1.6%), and materials (+1.4%) sectors paced the rebound effort on no specific news catalysts. The energy sector (+0.3%) overcame an early 3.3% decline, even as oil prices ($58.52/bbl, -2.61, -4.3%) fell 4% despite reports that the Suez Canal could be blocked for weeks.

The communication services (-0.3%) and information technology (-0.1%) sectors stymied the broader advance with modest declines.

[…]

U.S. Treasuries finished mixed and little changed. The 10-yr yield was unchanged at 1.61% after trading slightly lower amid the negative start in equities, while the 2-yr yield decreased one basis point to 0.13%. The U.S. Dollar Index increased 0.4% to 92.87.

[…]
  • Initial jobless claims for the week ending March 20 declined by 97,000 to 684,000 (Briefing.com consensus 710,000). Continuing claims for the week ending March 13 decreased by 264,000 to 3.870 million.
  • […]
  • The third estimate for Q4 GDP was revised up to 4.3% (Briefing.com consensus 4.1%) from 4.1% while the GDP Price Deflator was revised down to 2.0% (Briefing.com consensus 2.1%) from 2.1%.
  • […]
[…]
  • Russell 2000 +10.6% YTD
  • Dow Jones Industrial Average +6.6% YTD
  • S&P 500 +4.1% YTD
  • Nasdaq Composite +0.7% YTD

Overseas: 

  • Europe: DAX +0.1%, FTSE -0.6%, CAC +0.1%
  • Asia: Nikkei +1.1%, Hang Seng -0.1%, Shanghai -0.1%

Commodities: 

  • Crude Oil -2.52 @ 58.41
  • Nat Gas +0.04 @ 2.61
  • Gold -8.70 @ 1733.10
  • Silver -0.18 @ 25.06
  • Copper -0.06 @ 3.99

[…]
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