Morning Notes – Wednesday April 21, 2021

/ April 21, 2021

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down day – watch for a break above 4133.25 for a change of sentiments
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4119.07, 4114.82, and 4107.70
  • Critical resistance levels for S&P 500 are 4138.50, 4150.47, and 4164.16
  • Key levels for E-mini futures: break above 4132.25, the higher of 7:00 AM and break below 4115.00, the low of 1:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 4126.50 and the index closed at 4134.94 – a spread of about -8.50 points; futures closed at 4126.50 for the day; the fair value is +0.00
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -3.25; Dow by -4, and NASDAQ by -39.00

Markets Around The World

  • Markets in the East closed lower – Mumbai was closed for trading
  • European markets are higher
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
  • 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 1.562%, down -9.4 basis points from two weeks ago;
    • 30-years is at 2.259%, down -5.7 basis points;
    • 2-years yield is at 0.149%, down -0.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.413, down from 1.499
  • VIX
    • At 18.32 @ 7:45 AM; down from the last close; above 5-day SMA;
    • Recent high =  23.55 on March 25; low =  15.38 on April 14
    • Sentiment: Risk-Off-To-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 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 red candle with almost no upper shadow and lower shadow two-thirds the size of the real body; a three-day Evening Start pattern 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 50
    • RSI-9 has declined to just above 60 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; within that move another sideways move since 12:00 PM on Tuesday
    • Uptrend 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 has risen from below 30 to above 40
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving down since 3:30 PM on Friday making lower-highs and lower-lows; bouncing up since 3:00 PM on Tuesday
    • RSI-21 up near/above 50 from below 30
    • At/above EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 3:30 PM
  • The Bollinger Band is relatively stable but slightly expanded
    • Stochastic (9, 1, 3): %K is below %D since 7:00 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, April 20 in higher volume.  Dow Jones Transportation Average closed down.

From Briefing.com:

The S&P 500 declined 0.7% on Tuesday for its second straight decline, as it continued to consolidate its record-setting run. The Dow Jones Industrial Average (-0.8%) and Nasdaq Composite (-0.9%) performed similarly to the benchmark index, while the Russell 2000 struggled with a 2.0% decline.

[…]

Declining issues outpaced advancing issues by a 3:1 margin at the NYSE and Nasdaq. The cyclical energy (-2.7%), financials (-1.8%), and consumer discretionary (-1.2%) sectors underperformed with sharp losses.

[…]

The defensive-oriented utilities (+1.3%), real estate (+1.1%), consumer staples (+0.6%), and health care (+0.4%) sectors finished in positive territory.

[…]

U.S. Treasuries edged higher amid the negative bias in the broader equity market, pushing yields lower. The 2-yr yield decreased one basis point to 0.15%, and the 10-yr yield decreased four basis points to 1.56%. The U.S. Dollar Index increased 0.2% to 91.24. WTI crude futures declined 1.2%, or $0.74, to $62.61/bbl.

[…]
  • Russell 2000 +10.8% YTD
  • Dow Jones Industrial Average +10.5% YTD
  • S&P 500 +10.1% YTD
  • Nasdaq Composite +7.0% YTD

Overseas: 

  • Europe: DAX -1.6%, FTSE -2.0%, CAC -2.1%
  • Asia: Nikkei -2.0%, Hang Seng flat, Shanghai -0.1%

Commodities: 

  • Crude Oil -0.74 @ 62.64
  • Nat Gas -0.01 @ 2.73
  • Gold +8.90 @ 1778.60
  • Silver +0.02 @ 25.83
  • Copper -0.02 @ 4.21
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