Market Remarks

Morning Notes – Monday April 5, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day – watch for a break below 4029.00 for a change of sentiments
  • Key economic data report due during the day:
    • Final Services PMI ( 60.3 est.; prev. 60.0) at 9:45 AM
    • ISM Services PMI ( 58.3 est.; prev. 55.3) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4020.63, 4007.38, and 3997.43
  • Critical resistance levels for S&P 500 are 4045.92, 4057.26, and 4071.96
  • Key levels for E-mini futures: break above 4038.00, the high of 8:45 AM on Friday and break below 4029.50, the low of 6:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2021) closed at 4009.50 and the index closed at 4019.87 – a spread of about -10.25 points; futures closed at 4010.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +27.00; Dow by +235, and NASDAQ by +109.00

Markets Around The World

  • Markets in the East closed mixed – Tokyo, Seoul, and Singapore closed higher; Mumbai was down; Shanghai, Hong Kong, and Syndey were closed
  • European markets are mostly closed
  • 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 higher
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.714%, down -1.8 basis points from two weeks ago;
    • 30-years is at 2.350%, down -10.1 basis points;
    • 2-years yield is at 0.188%, up +2.7 basis points;
    • The 10-Year-&-2-Year spread is at 1.526, down from 1.571
  • VIX
    • At 17.53 @ 7:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  17.29 on April 1
    • 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 April 2 was a green candle with almost no upper shadow and small lower shadow; at all-time highs
    • Stochastic (9,1, 3): %K is crossing above %D
    • RSI (9) is above 65
  • The week was up +45.33 or +1.1%; the 5-week ATR is 126.27
  • An up week; fourth in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=3994.58, R1=4045.92, R2=4071.96; S1=3968.54, S2=3917.20; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle with almost no upper and lower shadow that gapped up; at all-time intraday and closing 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 65; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Trending up since 10:00 AM on March 25; at all-time highs;
    • Broke above a down-sloping flag on March 26; the  61.8% extension target near 4002.00 is achieved; the 100% extension target is near 4100.00;
    • RSI-21 above 70 after climbing above 90 on Friday; potential Bearish Divergence
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
    • Moving up after drifting sideways for a while
      • RSI-21 just above 60; potential Bearish Divergence
      • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 8:30 AM on Friday
  • The Bollinger Band is expanding since 5:00 AM
    • Stochastic (9, 1, 3): %K is above %D above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Thursday, April 1, the day before Good Friday Holiday, in mostly lower volume. NASDAQ Composite traded in higher volume.

On Friday following Non-Farm Payroll Employment reports S&P futures rallied to the all-time high.

For the week, major US indices closed higher in lower volume.

From Briefing.com:

The S&P 500 (+1.2%) set intraday and closing record highs on Thursday, topping the 4000 level for the first time, in a relatively broad-based advance. The Nasdaq Composite (+1.8%) and Russell 2000 (+1.5%) outperformed the benchmark index with solid gains, while the Dow Jones Industrial Average (+0.5%) rose modestly. […]

The 10-yr yield decreased seven basis points to 1.68%. The 2-yr yield decreased one basis point to 0.15%. The U.S. Dollar Index decreased 0.4% to 92.90. The CBOE Volatility Index (17.33, -2.07, -10.7%) dropped below 18.00.

[…]
  • Initial jobless claims for the week ending March 27 increased by 61,000 to 719,000 (Briefing.com consensus 679,000) from last week’s revised count of 658,000 (from 684,000). Continuing claims for the week ending March 20 decreased by 46,000 to 3.794 mln from last week’s revised level of 3.840 mln (from 3.870 mln).
  • […]
  • The ISM Manufacturing Index for March jumped to 64.7% (Briefing.com consensus 61.2%) from 60.8% in February, reaching a level not seen since late 1983. The dividing line between expansion and contraction is 50.0%. March marked the tenth consecutive month the ISM Manufacturing Index has been above 50.0%.
  • […]
  • Total construction spending decreased by 0.8% m/m in February (Briefing.com consensus -0.9%) after increasing a downwardly revised 1.2% (from 1.7%) in January. Total private construction spending fell 0.5% m/m and total public construction spending decreased 1.7%.
  • […]
  • The IHS Markit Manufacturing PMI increased to 59.1 in March from 59.0 in February.
[…]
  • Russell 2000 +14.1% YTD
  • Dow Jones Industrial Average +8.3% YTD
  • S&P 500 +7.0% YTD
  • Nasdaq Composite +4.6% YTD
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