Morning Notes – Thursday April 22, 2021

/ April 22, 2021

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a sideways to an up day – watch for a break above 4167.25  and a break below 4153.25 for clarity
  • Key economic data report due during the day:
    • Unemployment Claims ( 607K est.; prev. 576K) at 8:30 AM
    • CB Leading Index ( 1.0% est.; prev. 0.2%) at 10:00 AM
    • Existing Home Sales ( 6.18M est.; prev. 6.22M) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4163.77, 4156.25, and 4142.48
  • Critical resistance levels for S&P 500 are 4175.02, 4180.81, and 4191.31
  • Key levels for E-mini futures: break above 4167.00, the high of 2:00 AM and break below 4153.50, the low of 8:00 PM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2021) closed at 4162.50 and the index closed at 4173.42 – a spread of about -9.00 points; futures closed at 4164.75 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 -3.00; Dow by -11, and NASDAQ by -34.50

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai was down
  • 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 mixed
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.564%, down -8.9 basis points from two weeks ago;
    • 30-years is at 2.264%, down -7.1 basis points;
    • 2-years yield is at 0.153%, down -1.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.411, down from 1.488
  • VIX
    • At 17.31 @ 7:45 AM; down 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-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 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 Bullish Engulfing candle following two days of decline; near 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 crossing above %D from below 50
    • RSI-9 is turning up from just above 60; 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 April 16; bouncing up since 10:00 AM on April 20 from a support level; 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
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 3:30 PM on Wednesday;
    • RSI-21 up moving around 55
    • 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 since 2:30 AM
  • The Bollinger Band is relatively stable and narrow
    • Stochastic (9, 1, 3): %K is below %D since 7:45 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Wednesday, April 21 in lower volume.  Most major indices made Bullish Engulfing candles. All but on S&P sector – Utilities – closed higher.

From Briefing.com:

The S&P 500 increased 0.9% on Wednesday, bouncing back from back-to-back declines amid renewed buying interest. The Nasdaq Composite (+1.2%) and Dow Jones Industrial Average (+0.9%) posted similar gains. The small-cap Russell 2000 outperformed the large-cap indices with a 2.4% gain.

The advance was relatively broad-based with nine of the 11 S&P 500 sectors closing higher and advancing issues outpacing declining issues by more than a 3:1 margin at the NYSE and Nasdaq. Seven sectors rose more than 1.0%, including materials (+1.9%) and energy (+1.5%) atop the standings.

[…]

U.S. Treasuries finished little changed in a tight-ranged session that included a decent $24 billion 20-yr bond auction. The 2-yr yield decreased one basis point to 0.14%, and the 10-yr yield was unchanged at 1.56%. The U.S. Dollar Index decreased 0.1% to 91.13. WTI crude futures declined 2.0%, or $1.26, to $61.35/bbl.

[…]
  • Russell 2000 +13.4% YTD
  • Dow Jones Industrial Average +11.5% YTD
  • S&P 500 +11.1% YTD
  • Nasdaq Composite +8.2% YTD

Overseas: 

  • Europe: DAX +0.4%, FTSE +0.5%, CAC +0.7%
  • Asia: Nikkei -2.0%, Hang Seng -1.6%, Shanghai flat

Commodities: 

  • Crude Oil -1.45 @ 61.19
  • Nat Gas -0.04 @ 2.69
  • Gold +14.80 @ 1793.40
  • Silver +0.74 @ 26.57
  • Copper +0.07 @ 4.28
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