Morning Notes – Friday July 9, 2021

/ July 9, 2021

Directional Bias For The Day:

  • S&P Futures are higher;
  • The odds are for an up day with elevated volatility – watch for a break below 4319.75 for a change of sentiments
  • Key economic data report due during the day:
    • Final Wholesale Inventories ( 7.8% est.; prev. 8.2%) at 10:00 AM
    • Fed Monetary Policy Report
    • G20 Meeting

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4322.04, 4305.39, and 4293.99
  • Critical resistance levels for S&P 500 are 4351.48, 4355.92, 4361.88
  • Key levels for E-mini futures: break above 4336.00, the high of 7:30 AM on Tuesday and break below 4319.75, the low of 6:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2021) closed at 4315.50 and the index closed at 4320.82 – a spread of about -5.25 points; futures closed at 4313.00 for the day; the fair value is +2.50
  • Pre-NYSE session open, futures are mixed – at 8:45 AM, S&P 500 futures were up by +19.00; Dow up by +262, and NASDAQ down by -5.75

Markets Around The World

  • Markets in the East closed mostly lower – Sydney closed up;
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are mixed
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.288%, down -19.9 basis points from two weeks ago;
    • 30-years is at 1.910%, down -18.5 basis points;
    • 2-years yield is at 0.220%, down -4.5 basis points;
    • The 10-Year-&-2-Year spread is at 1.068, down from 1.222
  • VIX
    • At 17.28 @ 8:30 AM; down from the last close; above 5-day SMA;
    • Recent high =  21.82 on June 21; low =  14.10 on June 29
    • Sentiment: Risk-On

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 Doji candle that gapped down at the open, though the gap was closed; the lower shadow is almost three times the upper shadow;
    • %K is below %D from above 90
    • RSI-9 is declined to near 60 after making Bearish Divergence on July 7 ; below 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Rising since 8:00 AM on July 8 from near 4280.00 to above 4330.00;
    • RSI-21 up above 60 from below 20
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Back near the mid-point of a Horizontal Channel that was broken on Thursday; the 61.8% extension target near 4279.00; above 61.8% Fibonacci Retracement level of the decline
    • RSI-21 rising to above 60 from below 20
    • Above EMA20, which is Above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 1:30 AM
  • The Bollinger Band is expanded but stable
    • Stochastic (9, 1, 3): %K is below %D
  • Bias: Up

Previous Session

Major U.S. indices closed lower on Thursday, July 8 in higher volume. Major indices gapped down at the open and then declined a bit more in the morning session before turning around and recovering some of the losses.

From Briefing.com:

The S&P 500 (-0.9%) and Nasdaq Composite (-0.7%) pulled back from record territory on Thursday, as investors mainly took profits amid pestering peak growth concerns. The Dow Jones Industrial Average declined 0.8% while the Russell 2000 declined 0.9% after it led the major indices lower with a 2.7% intraday decline.

[…]

All 11 S&P 500 sectors closed lower, led by the cyclical financials (-2.0%), industrials (-1.4%), and materials (-1.4%) sectors. The consumer discretionary sector (-0.1%) declined just 0.1%

[…]

The 10-yr yield and 2-yr yield both settled lower by three basis points to 1.29% and 0.19%, respectively. The U.S. Dollar Index decreased 0.3% to 92.37.

[…]
  • For the week ending July 3, initial claims increased 2,000 to 373,000 (Briefing.com consensus 350,000). Continuing claims for the week ending June 26 decreased by 145,000 to 3.339 million — the lowest since March 21, 2020.
  • […]
  • Consumer credit increased by $35.3 bln in May (Briefing.com consensus $19.0B) after increasing an upwardly revised $20.0 bln (from $18.6 bln) in April. The key takeaway from the report is that the expansion in consumer credit in May was the largest since December 2010.
[…]
  • S&P 500 +15.0% YTD
  • Russell 2000 +13.0% YTD
  • Nasdaq Composite +13.0% YTD
  • Dow Jones Industrial Average +12.5% YTD

Overseas: 

  • Europe: DAX -1.7%, FTSE -1.7%, CAC -2.0%
  • Asia: Nikkei -0.9%, Hang Seng -2.8%, Shanghai -0.8%

Commodities: 

  • Crude Oil +0.94 @ 73.01
  • Nat Gas +0.10 @ 3.69
  • Gold -4.20 @ 1799.10
  • Silver -0.14 @ 26.03
  • Copper -0.06 @ 4.26
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