Market Remarks

Morning Notes – Tuesday, November 2, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit higher at 8:30 AM;
  • The odds are for an up day – watch for a break below 4598.00 for clarity
  • Key economic data report due during the day:
    • Day one of a two-day FOMC meeting

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4606.92, 4595.06, and 4589.00
  • Critical resistance levels for S&P 500 are 4620.34, 4624.32, and 4634.97
  • Key levels for E-mini futures: break above 4612.00, the high of 9:30 AM on Monday and break below 4598.50, the low of 5:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (December 2021) closed at 4606.00 and the index closed at 4613.67 – a spread of about -7.75 points; futures closed at 4605.75 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were up by +2.50; Dow up by +41; and NASDAQ down by -24.25

Markets Around The World

  • Markets in the East closed mostly lower – Seoul and Singapore closed higher
  • European markets are mixed – Germany, France, and Switzerland are up; the U.K., Spain, Italy, and STOXX 600 are down
  • Currencies (Compared to two weeks ago):
    Up Down
    • AUD/USD
    • NZD/USD
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.588%, down -2.6 basis points from two weeks ago;
    • 30-years is at 1.968%, down -4.9 basis points;
    • 2-years yield is at 0.488%, up +5.7 basis points;
    • The 10-Year-&-2-Year spread is at 1.070, down from 1.153
    • The 30-Year-&-10-Year spread is at 0.410, down from 0.433
  • VIX
    • At 16.46 @ 8:00 AM; up from the last close; below 5-day SMA;
    • Recent high = 24.89 on October 1; low =  14.84 on October 22
    • Sentiment: Risk-Neutral

The trend and patterns on various time frames for S&P 500:

Monthly
  • October 2021 was a Bullish Engulfing candle with  small lower shadow and almost no upper shadow; at all-time closing and intra-month highs;
    • Stochastic (9, 1, 3): %K above %D; near 100;
    • RSI-9 is turning up; above 75
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
Weekly:
  • The week ending on October 29 was a green candle at all-time highs
    • Stochastic (9,1, 3): %K is above %D; above 90
    • RSI-9 is above 70
  • The week was up +60.48 or +1.3%; the 5-week ATR  is 129.73
  • An up week; fourth in the last five weeks, and seventh in the previous ten weeks
  • The weekly pivot point=4583.61, R1=4629.85, R2=4654.33; S1=4559.13, S2=4512.89; R1 pivot level was breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Resumed
Daily
  • A Doji candle with an upper shadow smaller than the lower shadow at the all-time high;
    • Stochastic (9, 1, 3): %K is crisscrossing %D above 90
    • RSI-9 is near 75; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Broke above a Horizontal Channel – 61.8% extension target near 4618.00 is achieved; the 100% extension target is near 4635.00
    • RSI-21 is just above 60
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to up since 6:00 PM on Sunday after breaking above Friday’s close;
    • RSI-21 is just below 60
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 3:00 PM on Monday;
  • The Bollinger Band is expanding slightly since 6:45 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D higher
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Monday, November 1, in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in higher volume. The indices opened higher but then turned down and went negative before turning around in the afternoon session.

S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and Wilshire 5000 Total Market Index made all-time closing and intraday highs.

From Briefing.com:

The S&P 500 (+0.2%), Nasdaq Composite (+0.6%), and Dow Jones Industrial Average (+0.3%) rose modestly on Monday and each set intraday and closing record highs. The small-cap Russell 2000 (+2.7%) and iShares Micro-Cap ETF (IWC 151.65, +4.11, +2.8%) played catch-up with gains over 2.5%. […]

The 2-yr yield increased two basis points to 0.51%, and the 10-yr yield increased two basis points to 1.58%. The U.S. Dollar Index fell 0.3% to 93.86.

[…]
  • The October ISM Manufacturing Index checked in at 60.8% (Briefing.com consensus 60.5%), down from 61.1% in September. A number above 50.0% is indicative of expansion. October marked the 17th straight month of expansion for the manufacturing sector.
  • […]
  • Total construction spending declined 0.5% month-over-month in September (Briefing.com consensus +0.5%) following an upwardly revised 0.1% increase (from 0.0%) in August. Total private construction declined 0.5% month-over-month while total public construction spending decreased 0.7%.
  • […]
  • The final IHS Market Manufacturing PMI for September checked in at 58.4, down from 60.7 in the preliminary reading.
[…]
  • S&P 500 +22.8% YTD
  • Nasdaq Composite +21.0% YTD
  • Russell 2000 +19.4% YTD
  • Dow Jones Industrial Average +17.3% YTD

Overseas: 

  • Europe: DAX +0.8%, FTSE +0.7%, CAC +0.9%
  • Asia: Nikkei +2.6%, Hang Seng -0.9%, Shanghai -0.1%

Commodities: 

  • Crude Oil +0.55 @ 83.91
  • Nat Gas -0.26 @ 5.31
  • Gold +12.00 @ 1795.40
  • Silver +0.18 @ 24.12
  • Copper +0.01 @ 4.38
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