Morning Notes – Wednesday September 1, 2021

/ September 1, 2021

Directional Bias For The Day:

  • S&P Futures are higher; declined since 8:15 AM from 4539.50 to around 4530.00 just before open
  • The odds are for an up day with volatility – watch for a break below 4523.75 for a change of fortunes
  • Key economic data report due during the day:
    • ADP JNon-Farm Employment Change ( 374K vs. 640K est.; prev. 326K) at 8:15 AM
    • Final Manufacturing PMI ( 61.2 est.; prev. 61.2) at 9:45 AM
    • ISM Manufacturing PMI ( 58.5 est; prev. 59.5%) at 10:00 AM
    • Construction Spending ( 0.2% est.; prev. 0.1%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4525.75, 4518.35, and 4518.50
  • Critical resistance levels for S&P 500 are 4536.55, 4537.36, and 4546.37
  • Key levels for E-mini futures: break above 4539.50, the high of 8:15 AM and break below 4524.00, the low of 8:00 PM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2021) closed at 4520.25 and the index closed at 4522.68 – a spread of about -2.50 points; futures closed at 4520.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +12.25; Dow by +66; and NASDAQ by +45.25

Markets Around The World

  • Markets in the East closed mostly higher – Sydney and Mumbai closed lower
  • European markets are mostly higher – Germany is lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.304%, up +4.6 basis points from two weeks ago;
    • 30-years is at 1.927%, up +0.8 basis points;
    • 2-years yield is at 0.208%, down -0.1 basis points;
    • The 10-Year-&-2-Year spread is at 1.096, up from 1.049
  • VIX
    • At 16.11 @ 8:00 AM; down from the last close; below 5-day SMA;
    • Recent high =  24.74 on August 19; low =  15.19 on August 13
    • 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 August 27 was a Bullish Engulfing candle at all-time highs with a small upper shadow and almost no lower shadow;
    • Stochastic (9,1, 3): %K crossed  above %D; near 100
    • RSI-9 is above 70
  • The week was up +67.70 or +1.5%; the 5-week ATR is 70.62
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4491.00, R1=4531.70, R2=4554.04; S1=4468.66, S2=4427.96; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small red candle with small upper and lower shadows near all-time highs
    • %K crossed below %D near 100; potential Bearish Divergence
    • RSI-9 turned below 70; above 8-day EMA;  potential Bearish Divergence
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Sideways to up since 10:00 AM on August 30; uptrend since 4:00 Am on August 19 after a sideways move;
    • RSI-21 around 55 after declining from above 80 and after making a Bearish Divergence
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Drifting sideways to down since 1:30 AM
    • RSI-21 is drifting lower to just above 50
    • At/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 4:00 AM
  • The Bollinger Band is relatively stable but showing a start of an expansion at 9:00 AM
    • Stochastic (9, 1, 3): %K is below %D; below 20
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, August 31 in higher volume. Russell 2000 closed higher. the day’s price range was small.

From Briefing.com:

The S&P 500 (-0.1%), Nasdaq Composite (-0.04%), and Dow Jones Industrial Average (-0.1%) closed fractionally lower on Tuesday in a quiet session. The small-cap Russell 2000 ended the session with a modest gain of 0.3%.

[…]

Seven of the 11 S&P 500 sectors closed in negative territory, including energy (-0.7%) and information technology (-0.6%) at the bottom of the pack. The communication services (+0.3%), consumer discretionary (+0.4%), and real estate (+0.6%) sectors outperformed with modest gains.

[…]
  • The Conference Board’s Consumer Confidence Index fell to 113.8 in August (Briefing.com consensus 123.0) from a revised 125.1 (from 129.1) in July. The August drop sent the Index to its lowest level since February.
  • […]
  • The Chicago PMI for August decreased to 66.8 (Briefing.com consensus 68.0) following an unrevised 73.4 reading in July.
  • The S&P Case-Shiller Home Price Index increased 19.1% yr/yr in June (Briefing.com consensus 17.6%) following a revised 17.1% increase (from 17.0%) in May.
  • The FHFA Housing Price Index increased 1.6% m/m in June following a revised 1.8% increase (from 1.7%) in May.

 

  • S&P 500 +20.4% YTD
  • Nasdaq Composite +18.4% YTD
  • Dow Jones Industrial Average +15.5% YTD
  • Russell 2000 +15.1% YTD

Overseas: 

  • Europe: DAX -0.3%, FTSE -0.4%, CAC -0.1%
  • Asia: Nikkei +1.1%, Hang Seng +1.3%, Shanghai +0.5%

Commodities: 

  • Crude Oil -0.77 @ 68.44
  • Nat Gas +0.07 @ 4.38
  • Gold +6.30 @ 1818.40
  • Silver +0.04 @ 24.01
  • Copper +0.01 @ 4.37
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