Market Remarks

Morning Notes – Thursday April 8, 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 sideways move from pre-open levels around 4080.00- watch for a break below 4072.50 for a change of sentiments
  • Key economic data report due during the day:
    • Unemployment Claims ( 744K vs. 682K est.; prev. 719K) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Uptrend
  • Daily: Uptrend Resumed
  • 120-Min: Up
  • 30-Min: Side-Up
  • 15-Min: Up-Side
  • 6-Min: Down-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 4091.95, 4100.77, and  4118.66
  • Key levels for E-mini futures: break above 4092.75, the high of 1:45 AM and break below 4078.75, the low of 5:30 AM and break below 4072.50, the low of 7:00 PM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2021) closed at 4069.50 and the index closed at 4079.95 – a spread of about -10.50 points; futures closed at 4070.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +13.00; Dow by +6, and NASDAQ by +108.50

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo and Singapore closed lower;
  • European markets are mostly higher – Spain and Italy are down
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.653%, up +2.9 basis points from two weeks ago;
    • 30-years is at 2.335%, up +2.1 basis points;
    • 2-years yield is at 0.165%, up +1.3 basis points;
    • The 10-Year-&-2-Year spread is at 1.488, up from 1.462
  • VIX
    • At 17.00 @ 7:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  16.87 on April 7
    • 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 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 above %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;  broke above a short trading range at 12:00 PM on Wednesday
    • 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 rose to above 80 from below 50; another Bearish Divergence
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
    • Moving up since 4:00 PM on Wednesday after moving sideways since 10:30 AM on Monday
      • RSI-21 declined to around 55 from above 70 and making a BEarish Divergence
      • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 1:30 AM
  • The Bollinger Band is narrowing since 7:30 AM
    • Stochastic (9, 1, 3): %K is below %D below 20
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly lower on Wednesday, April 7 in mostly lower volume.  S&P 500 and DOw Jones Industrial Average closed higher and Russell 2000 traded in higher volume. Indices moved within a narrow range during the day.

From Briefing.com:

The S&P 500 (+0.2%) eked out a closing record high on Wednesday in another narrow trading session that reflected consolidation activity. The Nasdaq Composite (-0.1%) and Dow Jones Industrial Average (+0.1%) finished within 0.1% of their flat lines, while the Russell 2000 underperformed with a 1.6% decline. […]

The cyclical materials (-1.8%) and industrials (-0.4%) sectors finished as laggards, and the 10-yr Treasury note yield was unchanged at 1.65%.

Declining issues also outnumbered advancing issues at the NYSE and Nasdaq,

[…]

The 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index increased 0.1% to 92.41. WTI crude futures increased 0.6%, or $0.37, to $59.71/bbl.

[…]
  • The February Trade Balance report showed a widening in the deficit to $71.1 billion (Briefing.com consensus -$70.5 billion) from an upwardly revised -$67.8 billion (from -$68.2 billion) in January. The widening was the result of exports being $5.0 billion less than January exports, and imports being $1.7 billion less than January imports.
  • […]
  • Consumer credit increased by $27.6 bln in February after increasing by an upwardly revised $0.1 bln (from -$1.3 bln) in January. This was the largest monthly increase in consumer credit since November 2017.
  • […]
  • The weekly MBA Mortgage Applications Index fell 5.1% following a 2.2% decline in the prior week.
[…]
  • Russell 2000 +12.6% YTD
  • Dow Jones Industrial Average +9.3% YTD
  • S&P 500 +8.6% YTD
  • Nasdaq Composite +6.2% YTD
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