Market Remarks

Morning Notes – Friday April 16, 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 4170.00 – watch for a break below 4155.25 for a change in sentiments
  • Key economic data report due during the day:
    • Building Permits ( 1.77M vs. 1.75M est.; prev. 1.72M) at 8:30 AM
    • Housing Starts ( 1.74M vs. 1.60M est.; prev. 1.46M) at 8:30 AM
    • Prelim UoM Consumer Sentiment ( 88.9 est.; prev.84.9) at 10:00 AM
    • Prelim UoM Inflation Expectations ( prev. 3.1%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4161.46, 4158.07, and 4149.40
  • Critical resistance levels for S&P 500 are 4182.69, 4194.95, and 4216.42
  • Key levels for E-mini futures: break above 4172.50, the high of 8:00 AM and break below 4155.25, the low of 2:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2021) closed at 4163.25 and the index closed at 4170.42 – a spread of about -7.25 points; futures closed at 4162.50 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +9.00; Dow by +69, and NASDAQ by +34.00

Markets Around The World

  • Markets in the East closed higher
  • European markets are 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 higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.530%, down -14.9 basis points from two weeks ago;
    • 30-years is at 2.210%, down -13.0 basis points;
    • 2-years yield is at 0.153%, down -0.7 basis points;
    • The 10-Year-&-2-Year spread is at 1.377, down from 1.519
  • VIX
    • At 16.65 @ 6:45 AM; up from the last close; at/below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  15.38 on April 14
    • Sentiment: Risk-Neutral

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 9 was a green candle breaking away from previous weeks; almost no upper and lower shadows; at all-time highs
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is near 75
  • The week was up +108.93 or +2.7%; the 5-week ATR is 109.96
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4160.71, R1=4192.61, R2=4255.75; S1=4065.67, S2=4002.53; R1/R2/R3 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 no upper and lower shadows that is breaking away; at all-time intraday and closing highs
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 161.8% extension target near 4140.00 levels is achieved
    • %K has crossed above %D; above 90
    • RSI-9 is near 80; 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 100% extension target near 4100.00 is achieved; the 161.8% extension target is near 4260.00
    • RSI-21 is near 80; crossed above a down-trending line from April 2;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Trending up; broke above Thursday high at 5:30 AM
    • RSI-21 is just above 65
    • Above EMA 20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 2:15 AM
  • The Bollinger Band is expanding since 4:45 AM with price  walking up the upper bound
    • Stochastic (9, 1, 3): %K is crisscrossing %D higher
  • Bias: Up

Previous Session

Major U.S. indices closed higher on Thursday, April 15 in mixed volume. Dow Jones Industrial Average and Dow Jones Transportation Average traded in higher volume. Most indices closed at all-time highs.

From Briefing.com:

The S&P 500 (+1.1%), Dow Jones Industrial Average (+0.9%), and Nasdaq 100 (+1.6%) set intraday and closing record highs on Thursday, as the 10-yr yield dropped 11 basis points to 1.53% despite a batch of better-than-expected economic data. The Nasdaq Composite rose 1.3%. The Russell 2000 increased just 0.4%. […]

As expected, the mega-cap/growth/technology stocks benefited from the lower rates, but the gains were relatively broad with nine of the 11 S&P 500 sectors closing in positive territory. The information technology (+1.8%), health care (+1.7%), and real estate (+2.0%) sectors rose more than 1.5%. The energy (-0.9%) and financials (-0.1%) sectors closed lower.

[…]

The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.1% to 91.62. WTI crude futures increased 0.4%, or $0.28, to $63.44/bbl.

[…]
  • March retail sales soared 9.8% m/m (Briefing.com consensus 5.3%) following an upwardly revised 2.7% decline (from -3.0%) in February. Excluding autos, they were up 8.4% m/m (Briefing.com consensus 4.9%) following an upwardly revised 2.5% decline (from -2.7%) in February.
  • […]
  • Initial jobless claims for the week ending April 10 declined by 193,000 to 576,000 (Briefing.com consensus 695,000). Continuing claims for the week ending April 3 increased 4,000 to 3.731 million.
  • […]
  • Total industrial production increased 1.4% m/m in March (Briefing.com consensus 2.9%) following a downwardly revised 2.6% decline (from -2.2%) in February. The capacity utilization rate increased to 74.4% (Briefing.com consensus 75.9%) from a downwardly revised 73.4% (from 73.8%) in February.
  • […]
  • The Philadelphia Fed Index increased to 50.2 in April (Briefing.com consensus 35.0) from a downwardly revised 44.5 (from 51.8) in March.
  • The Empire State Manufacturing Survey increased to 26.3 in April (Briefing.com consensus 23.0) from 17.4 in March.
  • The NAHB Housing Market Index increased to 83.0 in April (Briefing.com consensus 84.0) from 82.0 in March.
  • Business inventories increased 0.5% m/m in February, as expected, following an upwardly revised 0.4% increase (from 0.3%) in January.
[…]
  • Russell 2000 +14.3% YTD
  • Dow Jones Industrial Average +11.2% YTD
  • S&P 500 +11.0% YTD
  • Nasdaq Composite +8.9% YTD

Overseas: 

  • Europe: DAX +0.3%, FTSE +0.6%, CAC +0.4%
  • Asia: Nikkei +0.1%, Hang Seng -0.4%, Shanghai -0.5%

Commodities: 

  • Crude Oil +0.27 @ 63.30
  • Nat Gas +0.04 @ 2.66
  • Gold +32.40 @ 1767.70
  • Silver +0.51 @ 25.97
  • Copper +0.09 @ 4.22
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