Morning Notes – Tuesday April 20, 2021

/ April 20, 2021

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down day with a good chance of a bounce from pre-open levels around 4135.00 – watch for a break above 4141.00
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4150.47, 4139.76, and 4120.87
  • Critical resistance levels for S&P 500 are 4163.68, 4180.81, and 4191.31
  • Key levels for E-mini futures: break above 4141.75, the low of 12:30 PM on Monday and break below 4131.00, the low of 6:30 PM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2021) closed at 4157.25 and the index closed at 4163.26 – a spread of about -6.00 points; futures closed at 4155.50 for the day; the fair value is +2.25
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -15.00; Dow by -130, and NASDAQ by -24.75

Markets Around The World

  • Markets in the East closed mostly lower – Hong Kong and Seoul closed higher
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.601%, down -11.9 basis points from two weeks ago;
    • 30-years is at 2.294%, down -6.9 basis points;
    • 2-years yield is at 0.165%, up +0.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.436, down from 1.563
  • VIX
    • At 18.34 @ 7:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  23.55 on March 25; low =  15.38 on April 14
    • Sentiment: Risk-Off

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 with almost no upper and lower shadows; at all-time highs
    • Stochastic (9,1, 3): %K is crossing below %D; near 100
    • RSI (9) is above 75
  • The week was up +56.67 or +1.4%; the 5-week ATR is 97.06
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4163.87, R1=4212.91, R2=4240.91; S1=4136.42, S2=4087.93; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively small red candle with almost no upper shadow and small lower shadow; a three-day Morning Start pattern emerging 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 is below %D; below 90
    • RSI-9 has declined to just above 70 from 80; below 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Drifting sideways to down since 4:00 PM on Friday; sequence of lower-high-lower-lows; trending up since 10:00 AM on March 25;
    • 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 trending down in steps; below 30
  • Below EMA10 of EMA50, which is below EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving down since 3:30 PM on Friday making lower-highs and lower-lows;
    • RSI-21 is near 30
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 3:30 AM
  • The Bollinger Band is expanding slightly since 3:30 AM with price walking down the lower band
    • Stochastic (9, 1, 3): %K is above %D since 6:30 AM
  • Bias: Side-Down

Previous Session

Major U.S. indices closed lower on Monday, April 19 in mostly lower volume. Russell 2000 traded in lower volume. All but two S&P sectors – Healthcare and Real Estate – closed lower.

From Briefing.com:

The S&P 500 declined 0.5% on Monday, putting a pause on the market’s record-setting run. The Dow Jones Industrial Average (-0.4%) joined the benchmark index with a modest decline, while the Nasdaq Composite (-1.0%) and Russell 2000 (-1.4%) fell by at least 1.0%.

Losses were spread across ten of the 11 S&P 500 sectors, declining issues easily outpaced advancing issues at the NYSE and Nasdaq, and growth stocks underperformed value stocks.

[…]

Elsewhere, the 10-yr yield increased three basis points to 1.60%, which some blamed for the relative weakness in the Nasdaq and growth stocks. The 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index fell 0.5% to 91.10. WTI crude futures increased 0.3%, or $0.19, to $63.35/bbl.

[…]
  • Russell 2000 +13.0% YTD
  • Dow Jones Industrial Average +11.3% YTD
  • S&P 500 +10.8% YTD
  • Nasdaq Composite +8.0% YTD
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