Market Remarks

Morning Notes – Tuesday May 25, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day – watch for a break below 4203.25 for  a change of sentiments
  • Key economic data report due during the day:
    • HPI ( 1.1% est.; prev. 0.9%) at 9:00 AM
    • S&P/CS Comp[osite-20 HPI (12.8% est.; prev. 13l9%) at 9:00 AM
    • CB Consumer Confidence ( 119.0 est.; prev. 121.7) at 10:00 AM
    • New Home Sales ( 950K est.; prev. 1021K) at 10:00 AM
    • Richmond Manufacturing Index ( 19 est.; prev. 17) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4195.91, 4170.16, and 4154.03
  • Critical resistance levels for S&P 500 are 4209.52, 4220.29, and 4236.39
  • Key levels for E-mini futures: break above 4212.75, the high of 2:15 AM and break below 4203.25, the low of 7:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2021) closed at 4194.50 and the index closed at 4197.05 – a spread of about -2.50 points; futures closed at 4193.75 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +13.25; Dow by +89, and NASDAQ by +79.75

Markets Around The World

  • Markets in the East closed mostly  higher – Mumbai closed down;
  • European markets are mostly higher – the UK is lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.608%, up +0.6 basis points from two weeks ago;
    • 30-years is at 2.302%, down -1.7 basis points;
    • 2-years yield is at 0.149%, down -0.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.459, up from 1.445
  • VIX
    • At 18.31 @ 7:45 AM; lower from the last close; below 5-day SMA;
    • Recent high =  25.96 on May 19; low =  16.68 on May 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 May 21 was a red candle like a Hamme, with a small body, a small upper shadow, and a long lower shadow; the whole candle is almost within the long lower shadow of the previous week’s BEarish Engulfing candle indicating a potential reversal
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) is around 65 75
  • The week was down -17.99 or -0.4%; the 5-week ATR is 107.20
  • A down week; third in the last five weeks, and fourth in the last ten weeks
  • The weekly week pivot point=4135.33, R1=4209.25, R2=4262.64; S1=4081.94, S2=4008.02; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle that opened up with almost no lower shadow and small upper shadow;
    • %K is above %D
    • RSI-9 is just near 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend under Pressure
2-Hour (E-mini futures)
  • Moving up since 10:00 AM on May 19; broke above a resistance level around 4180.00; next resistance is the all-time high of 4238.25
    • RSI-21 is above 75
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Uptrend since 10:30 AM on May 19
    • RSI-21 is moving around 60
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 2:30 PM on Monday
  • The Bollinger Band is contracting since 5:45 AM
    • Stochastic (9, 1, 3): %K is crossing below %D at 8:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Monday, May 24 in lower volume. Indices opened higher and then mostly traded higher with a brief decline in the final hour of trading. All but one S&P sector – Utilities, the defensive sector – closed up for the day.

From Briefing.com:

The S&P 500 advanced 1.0% on Monday, thanks in large part to the heavily-weighted growth stocks. The Nasdaq Composite (+1.4%) outperformed with a 1.4% gain while the Dow Jones Industrial Average (+0.5%) and Russell 2000 (+0.5%) both increased 0.5%.

Ten of the 11 S&P 500 sectors finished in positive territory, and none were more influential to today’s performance than the information technology (+1.8%), communication services (+1.8%), and consumer discretionary (+1.0%) sectors due to their mega-cap components. The Vanguard Mega Cap Growth ETF (MGK 217.71, +3.41) gained 1.6%.

[…]

The 2-yr yield was flat at 0.15%. The U.S. Dollar Index decreased 0.2% to 89.83. WTI crude futures rose 3.7%, or $2.38, to $66.02/bbl. The CBOE Volatility Index (19.01, -1.14, -4.7%) slipped below the 20.00 level, indicating reduced hedging interest.

[…]
  • Russell 2000 +12.8% YTD
  • Dow Jones Industrial Average +12.4% YTD
  • S&P 500 +11.7% YTD
  • Nasdaq Composite +6.0% YTD

Overseas: 

  • Europe: DAX CLOSED, FTSE +0.5%, CAC +0.4%
  • Asia: Nikkei +0.2%, Hang Seng flat, Shanghai +0.3%

Commodities: 

  • Crude Oil +2.29 @ 65.95
  • Nat Gas +0.05 @ 2.96
  • Gold +6.70 @ 1884.10
  • Silver +0.34 @ 27.88
  • Copper +0.04 @ 4.54
Exit mobile version