Market Remarks

Morning Notes – Thursday June 17, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a down day with elevated volatility – watch for a break above 4206.25 for a change of sentiments
  • Key economic data report due during the day:
    • Philly Fed Manufacturing Index ( 30.7 vs. 30.3 est.; prev. 31.5) at 8:30 AM
    • Unemployment Claims ( 412K vs. 360K est.; prev. 375K) at 8:30 AM
    • CB Leading Index (  1.3% est.; prev. 1.6%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4202.45, 4192.11, and 4167.93
  • Critical resistance levels for S&P 500 are 4222.55, 4238.86, and 4247.95
  • Key levels for E-mini futures: break above 4226.25, the high of 7:00 PM on Tuesday and break below 4191.25, the low of 4:45 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2021) closed at 4213.50 and the index closed at 4223.70 – a spread of about -10.25 points; futures closed at 4213.00 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -15.25; Dow by -115, and NASDAQ by -80.75

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai and Hong Kong closed higher
  • European markets are mostly lower – Germany and Spain are up
  • 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 1.569%, down -2.2 basis points from two weeks ago;
    • 30-years is at 2.209%, down -7.1 basis points;
    • 2-years yield is at 0.213%, up +7.6 basis points;
    • The 10-Year-&-2-Year spread is at 1.356, down from 1.454
  • VIX
    • At 18.42 @ 6:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  25.96 on May 19; low =  15.04 on June 14
    • 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 red candle with almost no upper shadow and a lower shadow equal t the real body;
    • %K is below %D; below 40 from above 90
    • RSI-9 declined to just above 50; below 8-day EMA
  • At/above 20-day EMA; above 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Declining since 2:00 AM on June 15 from the all-time high; bouncing up from a low 4183.00 at 8:00 PM on Wednesday;
    • RSI-21 near 35 after declining to just above 10
    • Below EMA20; which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Bouncing up since 8:00 PM on Wednesday from a low of 4183.00; declining since 7:00 AM
    • RSI-21 is above 40 from near 25
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting up since 12:00 AM
  • The Bollinger Band is expanding slightly since 7:00 AM with price going below the middle band from the upper band
    • Stochastic (9, 1, 3): %K is below %D since 7:15 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly lower on Wednesday, June 16 in higher volume. The market bias was down from the beginning but the selling increased after the FOMC Statement and the Press Conference at 2:30 PM. The indices recovered a bit near the close however the futures declined in after-market.

From Briefing.com:

The S&P 500 declined 0.5% on Wednesday, as the market weighed a hawkish-sounding FOMC policy announcement against an accommodative tone from Fed Chair Powell. The Nasdaq Composite (-0.2%) and Russell 2000 (-0.2%) both declined just 0.2% while the Dow Jones Industrial Average declined 0.8%. […]

The S&P 500 was down as much as 1.0% during the start of Fed Chair Powell’s follow-up press conference while the fed-funds-sensitive 2-yr yield rose five basis points to 0.21%. The 10-yr yield touched 1.59% before settling at 1.57%, or seven basis points above yesterday’s settlement. The U.S. Dollar Index rose 0.8% to 91.28.

[…]

WTI crude futures settled relatively unchanged at $72.06/bbl.

[…]
  • Total housing starts increased 3.6% month-over-month to a seasonally adjusted annual rate of 1.572 million units (Briefing.com consensus 1.635 million). Total permits decreased 3.0% month-over-month to 1.681 million (Briefing.com consensus 1.730 million).
  • […]
  • Import prices increased 1.1% in May, while import prices excluding oil increased 0.9%. Export prices increased 2.2% in May, while export prices excluding agriculture increased 1.7%.
  • The weekly MBA Mortgage Applications Index increased 4.2% following a 3.1% decline in the prior week.
[…]
  • Russell 2000 +17.2% YTD
  • S&P 500 +12.5% YTD
  • Dow Jones Industrial Average +11.2% YTD
  • Nasdaq Composite +8.9% YTD

Overseas: 

  • Europe: DAX -0.1%, FTSE +0.2%, CAC +0.2%
  • Asia: Nikkei -0.5%, Hang Seng -0.7%, Shanghai -1.1%

Commodities: 

  • Crude Oil -0.01 @ 72.06
  • Nat Gas +0.02 @ 3.25
  • Gold +5.20 @ 1861.50
  • Silver +0.11 @ 27.82
  • Copper +0.05 @ 4.39
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