Morning Notes – Wednesday April 7, 2021

/ April 7, 2021

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a sideways to  a down day – watch for a break above 4070.00 for a change of sentiments
  • Key economic data report due during the day:
    • Trade Balance ( -70.2B est.; prev. -68.2B) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4068.14, 4052.99, and 4034.44
  • Critical resistance levels for S&P 500 are 4081.67, 4094.19, and 4102.16
  • Key levels for E-mini futures: break above 4070.00, the high of 3:45 AM and break below 4058.25, the low of 3:45 PM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 4064.50 and the index closed at 4073.94 – a spread of about -9.50 points; futures closed at 4064.00 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -3.25; Dow by -2, and NASDAQ by -2.00

Markets Around The World

  • Markets in the East closed mixed – Tokyo, Sydney, Mumbai, and Seoul closed higher; Shanghai, Hong Kong, and Singapore closed lower;
  • European markets are mostly lower – the UK is higher
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.656%, up +1.8 basis points from two weeks ago;
    • 30-years is at 2.316%, down -3.2 basis points;
    • 2-years yield is at 0.157%, up +1.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.499, up from 1.493
  • VIX
    • At 17.89 @ 6:45 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-Neutral-to-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 small candle with almost no upper and lower shadow; 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 crossing below %D; above 90
    • RSI-9 is near 75; 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; moving sideways to down since 10:00 AM on Monday
    • 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 moving down in steps after climbing above 90 on Friday and making a Bearish Divergence on Monday
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Moving sideways since 10:30 AM on Monday
      • RSI-21 just below 50 after a Bearish Divergence on Monday
      • At/above EMA20, which is at/above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 3:15 PM on Monday
  • The Bollinger Band is stable and narrow
    • Stochastic (9, 1, 3): %K is below %D below 20
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, April 6 in lower volume.  NYSE Composite and Wilshire 5000 Total Market Index closed higher. Indices moved within a narrow range during the day.

From Briefing.com:

The S&P 500 eked out an intraday record high on Tuesday, but it closed lower by 0.1% in a lackluster session. The Nasdaq Composite (-0.1%), Dow Jones Industrial Average (-0.3%), and Russell 2000 (-0.3%) accompanied the benchmark index in negative territory with small declines.

[…]

The utilities (+0.5%), consumer discretionary (+0.3%), and consumer staples (+0.3%) sectors outperformed in positive territory. The information technology (-0.4%) and health care (-0.4%) sectors were influential laggards.

[…]

The 10-yr yield decreased six basis points to 1.66%. The 2-yr yield decreased one basis point to 0.16%. The U.S. Dollar Index decreased 0.3% to 92.30. WTI crude futures rebounded 1.1%, or $0.65, to $59.34/bbl after sliding 4% yesterday.

[…]
  • Russell 2000 +14.4% YTD
  • Dow Jones Industrial Average +9.2% YTD
  • S&P 500 +8.5% YTD
  • Nasdaq Composite +6.3% YTD
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