Market Remarks

Morning Notes – Tuesday July 13, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a down day — watch for a break above 4379.25 for a change of sentiments
  • Broke below a Horizontal Channel following CPI report at 8:30 AM; the e61.8% extension target near 4361.50 is achieved; 100% extension target is near 4358.00 and 161.8% extension target is near 4351.00
  • Key economic data report due during the day:
    • NFIB Small Business Index (102.5 vs. 99.5 est.; prev. 99.6) at 6:00 AM
    • CPI ( 0.9% vs. 0.5% est.; prev. 0.6%) at 8:30 AM
    • Core CPI ( 0.9% vs. 0.4% est.; prev. 0.7%) at 8:30 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 4374.76, 4364.03, and 4359.98
  • Critical resistance levels for S&P 500 are 4392.86, 4401.10, and 4415.51
  • Key levels for E-mini futures: break above 4379.25, the high of 3:45 PM on Monday and break below 4368.00, the low of 3:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2021) closed at 4376.25 and the index closed at 4384.63 – a spread of about -8.75 points; futures closed at 4376.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were unchanged; Dow down by -23, and NASDAQ up by +43.50

Markets Around The World

  • Markets in the East closed mostly higher – Sydney closed down;
  • European markets are mostly lower – the UK is higher
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.363%, down -11.5 basis points from two weeks ago;
    • 30-years is at 1.993%, down -10.5 basis points;
    • 2-years yield is at 0.229%, down -2.1 basis points;
    • The 10-Year-&-2-Year spread is at 1.134, down from 1.228
  • VIX
    • At 16.02 @ 6:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  21.82 on June 21; low =  14.10 on June 29
    • Sentiment: Risk-Neutral-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 9 was a long-legged Doji like candle with a small upper shadow
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is just above 70
  • The week was up +17.21 or +0.4%; the 5-week ATR is 83.35
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4343.51, R1=4397.64, R2=4425.74; S1=4315.41, S2=4261.28; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively small green candle with almost no upper shadow and a small lower shadow at all-time highs;
    • %K crossed above %D; above 90
    • RSI-9 is above 70; above 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 in steps; retracing since 2:00 PM on Monday from all-time highs;
    • RSI-21 just below 70; Bearish Divergence on Monday
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Drifting sideways to down since 2:00 PM on Monday at all-time highs;
    • RSI-21 moving along 60
    • Above EMA20, which is Above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 3:45 PM on Monday
  • The Bollinger Band is expanding a bit since 4:45 AM with prie near the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Monday, July 12 in mostly lower volume. Dow Jones Transportation Average closed lower and Dow Jones Industrial Average traded in lower volume. S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market Index made all-time closing and intraday highs. DJIA closed at an all-time high. All but three S&P sectors – Consumer Staples, Energy, and Telecom – closed up.

From Briefing.com:

The S&P 500 (+0.4%), Nasdaq Composite (+0.2%), and Dow Jones Industrial Average (+0.4%) closed at record highs on Monday, tallying modest gains as investors remained committed to the market ahead of a busy week of events. The S&P 500 also set an all-time intraday high while the Russell 2000 increased just 0.1%. […]

The 10-yr yield settled one basis point higher at 1.36% after touching 1.33% overnight, and the 2-yr yield settled one basis point higher at 0.22% after touching 0.20% overnight.

[…]
  • S&P 500 +16.7% YTD
  • Russell 2000 +15.5% YTD
  • Nasdaq Composite +14.3% YTD
  • Dow Jones Industrial Average +14.3% YTD

Overseas: 

  • Europe: DAX +0.7%, FTSE +0.1, CAC +0.5%
  • Asia: Nikkei +2.3%, Hang Seng +0.7%, Shanghai +0.7%

Commodities: 

  • Crude Oil -0.39 @ 74.24
  • Nat Gas +0.08 @ 3.76
  • Gold -4.90 @ 1806.30
  • Silver +0.07 @ 26.30
  • Copper unch @ 4.33
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