Market Remarks

Morning Notes – Thursday April 1, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day with a good chance of  a sideways move from pre-open levels around 3985.00 day – watch for a break below 3976.50 for change of sentiments
  • Key economic data report due during the day:
    • Challenger Jobs Cuts (-86.2%; prev. -39.1%) at 7:30 AM
    • Unemployment Claims ( 719K vs. 678K est.; prev. 658K) at 8:30 AM
    • Final Manufacturing PMI ( 59.2 est.; prev. 59.0) at 9:45 AM
    • ISM Manufacturing PMI ( 61.5 est.; prev. 60.8) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3972.99, 3966.98, and 3948.77
  • Critical resistance levels for S&P 500 are 3994.41, 4995.52, and 4016.64
  • Key levels for E-mini futures: break above 3984.50, the high of 5:00 AM and break below 3976.50, the low of 7:00 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2021) closed at 3968.75 and the index closed at 3972.89 – a spread of about -14.25 points; futures closed at 3967.50 for the day; the fair value is +1.25
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +15.00; Dow by +34, and NASDAQ by +146.75

Markets Around The World

  • Markets in the East closed higher
  • European markets are mostly higher – Italy is down
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • INR/USD
    • EUR/USD
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.705%, up +6.4 basis points from two weeks ago;
    • 30-years is at 2.371%, down -6.6 basis points;
    • 2-years yield is at 0.160%, up +1.9 basis points;
    • The 10-Year-&-2-Year spread is at 1.545, up from 1.500
  • VIX
    • At 18.47 @ 7:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  23.90 on March 19; low =  18.68 on March 26
    • Sentiment: Risk-On

The trend and patterns on various time frames for S&P 500:

Monthly
  • Confirmed Uptrend
  • March 2021 was a green candle with a small upper shadow and a lower shadow almost equal to the real body; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 75; 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 small Doji just almost no lower shadow and small upper 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 from above 90
    • RSI-9 is just 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)
  • Drifting sideways since 2:00 PM on March 26; changed bias from down to up
    • Broke above a down-sloping flag on March 26; the  61.8% extension target is near 4002.00 and 100% extension target is hear 4100.00;
    • RSI-21 above 70 after dipping below 60
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
    • Drifting sideways to up since 10:30 AM on Wednesday
      • RSI-21 just above 50
      • At/above EMA10 of EMA50, which is at/above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 5:15 AM
  • The Bollinger Band is contracting since 8:00 AM
    • Stochastic (9, 1, 3): %K is above %D above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Wednesday, March 31 in mixed volume. S&P 500, NASDAQ Composite, Russell 2000, and Wilshire 5000 Total Market Index closed higher. Dow Jones Transportation Average and Russell 2000 traded in lower volume. For the day, most major indices traded higher but gave up some of the gains in the least hour of trading.

From Briefing.com:

The S&P 500 (+0.4%) set an intraday record high on Wednesday on the back of renewed strength in the mega-cap/growth/technology stocks, but the market pared gains into the close. The Nasdaq Composite (+1.5%) and Russell 2000 (+1.1%) outperformed the benchmark index, while the Dow Jones Industrial Average (-0.3%) closed slightly lower. […]

The S&P 500 information technology (+1.5%) and consumer discretionary (+0.8%) sectors finished atop the sector standings, the Vanguard Mega Cap Growth ETF (MGK 207.07, +2.90, +1.4%) rose 1.4%, the ARK Innovation ETF (ARKK 119.95, +5.53, +4.8%) rose 4.8%, and the Philadelphia Semiconductor Index rose 2.6%.

Conversely, the energy (-0.9%) and financials (-0.9%) sectors — the Q1 winners — underperformed alongside the materials (-0.5%), industrials (-0.3%), real estate (-0.5%), and consumer staples (-0.5%) sectors.

[…]

The 2-yr yield increased two basis points to 0.16%, and the 10-yr yield increased two basis points to 1.75%. The U.S. Dollar Index decreased 0.1% to 93.22. WTI crude futures decreased 2.3%, or $1.38, to $59.19/bbl.

[…]
  • The ADP Employment report pointed to the addition of 517,000 private payrolls in March (Briefing.com consensus 525,000) while the February increase was revised up to 176,000 from 117,000.
  • The Chicago PMI for March increased to 66.3 (Briefing.com consensus 60.0) from 59.5 in February.
  • Pending home sales dropped 10.6% in February (Briefing.com consensus -2.6%) following a 2.4% decline in January (from -2.8%)
  • The weekly MBA Mortgage Applications Index decreased 2.2% following a 2.5% decline in the prior week.
[…]
  • Russell 2000 +12.4% YTD
  • Dow Jones Industrial Average +7.8% YTD
  • S&P 500 +5.7% YTD
  • Nasdaq Composite +2.8% YTD
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