Market Remarks

Morning Notes – Wednesday June 16, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit lower;
  • Essentially moving sideways since 2:00 PM on Tuesday awaiting FOMC Statement and Press Conference later today
  • The odds are for a sideways day – watch for a break above 4242.50 and a break below 4231.50 for clarity
  • Key economic data report due during the day:
    • Building Permits ( 1.68M vs. 1.73M est.; prev. 1.75M) at 8:30 AM
    • Housing Starts ( 1.57M vs. 1.64M est.; prev. 1.57M) at 8:30 AM
    • Import Prices ( 1.1% vs. 0.8% est.; prev. 0.7%) at 8:30 AM
    • FOMC Statement at 2:00 PM
    • FOMC Press Conference at 2:30 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4238.35, 4232.25, and 4220.34;
  • Critical resistance levels for S&P 500 are 4252.84, 4257.16, and 4266.18
  • Key levels for E-mini futures: break above 4242.50, the high of 2:30 PM on Tuesday and break below 4231.50, the low of 4:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2021) closed at 4237.50 and the index closed at 4246.59 – a spread of about -9.00 points; futures closed at 4236.50 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were down by -2.50; Dow down by -51, and NASDAQ up by +6.75

Markets Around The World

  • Markets in the East closed mostly lower – Sydney and Seoul closed higher
  • European markets are mixed – the UK, France, Switzerland, and STOXX 600 are up; Germany, Spain, and Itlay are down
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.499%, down -11.6 basis points from two weeks ago;
    • 30-years is at 2.199%, down -9.7 basis points;
    • 2-years yield is at 0.157%, up +0.9 basis points;
    • The 10-Year-&-2-Year spread is at 1.338, down from 1.467
  • VIX
    • At 17.21 @ 7:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  25.96 on May 19; low =  15.15 on June 8
    • Sentiment: Risk-Off

The trend and patterns on various time frames for S&P 500:

Monthly
  • Confirmed Uptrend
  • May 2021 was a Doji with a small upper shadow and a long lower shadow; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 80; 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
Weekly:
  • The week ending on June 11 was a small green candle at all-time highs with almost no upper shadow and a small lower shadow
    • Stochastic (9,1, 3): %K is above %D;
    • RSI (9) is just above 70
  • The week was up +17.55 or +0.4%; the 5-week ATR is 95.37
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4235.20, R1=4261.98, R2=4276.53; S1=4220.65, S2=4193.87; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small red candle at all-times highs; driving sideways to up for the past few days
    • %K crossed below %D above 90
    • RSI-9 declined to near 64 from near 70; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Moving sideways since 10:00 AM on June 10
    • RSI-21 moving along just below 40
    • Below EMA20; at/above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 2:00 PM on Tuesday within a narrow range
    • RSI-21 is moving along just above 40;
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 2:30 PM on Tuesday
  • The Bollinger Band is relatively narrow
    • Stochastic (9, 1, 3): %K is above %D since 8:00 AM
  • Bias: Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, June 15 in mixed volume. Dow Jones Transportation Average closed higher. S&P 500 and  NASDAQ Composite traded in higher volume. Major indices traded lower from the start before recovering a bit near the end.

From Briefing.com:

The S&P 500 declined 0.2% on Tuesday and traded slightly lower the entire the session, except for the opening tick, which marked an all-time high for the benchmark index. The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-0.3%) performed similarly, while the Nasdaq Composite (-0.7%) underperformed.
[…]

Today’s economic calendar featured a 1.3% m/m decline in retail sales for May (Briefing.com consensus -0.6%), a 0.8% m/m increase in the Producer Price Index (PPI) for May (Briefing.com consensus 0.5%), and 0.8% m/m increase in industrial production for May (Briefing.com consensus 0.7%).

[…]

The 2-yr yield increased one basis point to 0.16%. The U.S. Dollar Index was unchanged at 90.52. Copper futures fell 4.2%, or $0.19, to $4.34/bbl amid profit-taking interest, leaving it down 7% this month.

[…]
  • Russell 2000 +17.5% YTD
  • S&P 500 +13.1% YTD
  • Dow Jones Industrial Average +12.1% YTD
  • Nasdaq Composite +9.2% YTD
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