Market Remarks

Morning Notes – Tuesday July 6, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a little changed;
  • The odds are for a sideways to down day – watch for a break above 4343.50 and a break below 4336.00 for clarity
  • Key economic data report due during the day:
    • Final Services PMI ( 64.8 est.; prev. 64.8) at 9:45 AM
    • ISM Services PMI ( 63.4 est.; prev. 64) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4345.15, 4331.09, and 4326.60
  • Critical resistance levels for S&P 500 are 4362.98, 4373.62, and 4391.81
  • Key levels for E-mini futures: break above 4343.50, the high of 2:45 AM and break below 4336.75, the low of 3:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (September 2021) closed at 4343.00 and the index closed at 4352.34 – a spread of about -9.25 points; futures closed at 4342.75 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are mixed – at 9:00 AM, S&P 500 futures were down by -0.50; Dow down by -13, and NASDAQ up by +23.00

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Sydney, and Mumbai closed up; Tokyo, Seoul, and Singapore closed down
  • European markets are mixed – Germany, the UK, France, and Italy are higher; Spain, Switzerland, and STOXX 600 are higher
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.424%, down -6.0 basis points from two weeks ago;
    • 30-years is at 2.032%, down -7.2 basis points;
    • 2-years yield is at 0.244%, down -0.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.180, down from 1.238
  • VIX
    • At 15.88 @ 8:15 AM; up from the last close; above 5-day SMA;
    • Recent high =  21.82 on June 21; low =  14.10 on June 29
    • Sentiment: Risk-Off-Neutral

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 July 2 was a green candle that gapped up at the open and made all-time highs with almost no lower and  upper shadows
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is just above 70
  • The week was up +71.64 or +1.7%; the 5-week ATR is 80.14
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4327.48, R1=4380.29, R2=4408.24; S1=4299.53, S2=4246.72; R1 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 gapped up with almost no upper and lower shadows
    • %K is above %D; above 90
    • RSI-9 is near 80; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 10:00 PM on June 20; sideways move since 2:00 PM on July 2
    • RSI-21 declined to just below 60 after making a Bearish Divergence on Monday
    • Above EMA20; which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 1:00 PM on July 2;
    • RSI-21 declining since 1:00 PM on Friday; made Bearish Divergence on Monday
    • At/above EMA20, which is at/above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 7:30 PM on July 4
  • The Bollinger Band is relatively narrow;
    • Stochastic (9, 1, 3): %K is crisscrossing %D
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, July 2 in mostly higher volume. Russell 2000 and Dow Jones Transportation Average closed lower. Transports reader in lower volume. Most indices gapped up the open and then mostly traded higher for the day.

All but three S&P sectors – Energy, Financials, and Telecom – closed higher. S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market Index made all-time intraday and closing highs. DJIA closed at an all-time high.

For the week, most major US indices closed higher in mixed volume. Russell 2000 closed down. Asian and European markets were mostly down. The dollar index was up, energy and precious metals closed up. Industrial metals were down and soft commodities were mixed.

From Briefing.com:

The S&P 500 (+0.8%), Nasdaq Composite (+0.8%), and Dow Jones Industrial Average (+0.4%) closed at record highs on Friday, powered by the mega-caps following a June employment report that was deemed okay. The S&P 500 and Nasdaq also set all-time intraday highs, while the Russell 2000 fell 1.0% amid weakness in energy and financial stocks. […]

The mega-caps lifted the S&P 500 information technology (+1.4%), consumer discretionary (+1.1%), and communication services (+0.9%) sectors to the top of the leaderboard. Conversely, the financials (-0.2%) and energy (-0.2%) sectors closed slightly lower.

[…]

The 10-yr yield decreased four basis points to 1.43% while the 2-yr yield decreased one basis point to 0.24%. The U.S. Dollar Index fell 0.4% to 92.24. WTI crude futures decreased 0.4%, or $0.31, to $74.92/bbl without an OPEC+ supply decision.

[…]
    • June Nonfarm Payrolls (Actual 850K, Briefing.com consensus 680K; Prior revised to 583K from 559K)
    • […]
    • June Avg. Hourly Earnings (Actual +0.3%; Briefing.com consensus +0.4%; Prior revised to +0.4% from +0.5%)
    • June Unemployment Rate (Actual 5.9%; Briefing.com consensus 5.7%; Prior 5.8%)
    • June Average Workweek (Actual 34.7; Briefing.com consensus 35.0; Prior revised to 34.8 from 34.9)
    • June labor force participation rate unchanged at 61.6%
[…]
  • Russell 2000 +16.8% YTD
  • S&P 500 +15.9% YTD
  • Dow Jones Industrial Average +13.7% YTD
  • Nasdaq Composite +13.6% YTD
Exit mobile version