Market Remarks

Morning Notes – Wednesday, November 10, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:30 AM; mostly moving down since 3:40 AM on Tuesday
  • The odds are for a down day – watch for a break above 4680.25  for a change of sentiments
  • Key economic data report due during the day:
    • CPI ( 0.9% vs. 0.6% est.; prev. 0.4%) at 8:30 AM
    • Core CPI ( 0.6% vs. 0.4% est.; prev. 0.2%) at 8:30 AM
    • Unemployment Claims ( 267k vs. 257K est.; prev. 271K) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4664.29, 4650.50, and 4633.63
  • Critical resistance levels for S&P 500 are 4671.30, 4691.32, and 4708.53
  • Key levels for E-mini futures: break above 4670.75, the high of 8:00 AM and break below 4658.25, the low of 10:45 PM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2021) closed at 4678.75 and the index closed at 4685.25 – a spread of about -6.75 points; futures closed at 4678.25 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -8.25; Dow down by -46; and NASDAQ by -59.25

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Seoul closed higher; Tokyo, Sydney, Mumbai, and Singapore closed lower
  • European markets are mostly higher – Italy is down;
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • NZD/USD
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are mixed
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.497%, down -13.8 basis points from two weeks ago;
    • 30-years is at 1.887%, down -19.8 basis points;
    • 2-years yield is at 0.443%, up +0.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.054, down from 1.194
    • The 30-Year-&-10-Year spread is at 0.390, down from 0.450
  • VIX
    • At 18.21 @ 8:00 AM; up from the last close; above 5-day SMA;
    • Recent high = 24.89 on October 1; low =  14.73 on November 4
    • Sentiment: Risk-Off

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 November 5 a relatively larger 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 Bearish Engulfing candle at all-time highs with almost no upper shadow and a small lower shadow
    • Stochastic (9, 1, 3): %K is below %D above 80
    • RSI-9 turned down to 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)
  • Trending up since October 1 in steps; drifting sideways to down since 8:00 AM on November 8
    • RSI-21 declined from 85 on Friday to below 50;
  • Below EMA10 of EMA50, which is below EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to down since 8:30 AM on November 5
    • RSI-21 is below 50
    • At/above EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 11:15 AM on November 9;
  • The Bollinger Band is expanding slightly since 3:30 AM; price first walked down the lower band and then bounced up to the middle band
    • Stochastic (9, 1, 3): %K is crisscrossing %D around 80;
  • Bias: Side-Down

Previous Session

Major U.S. indices closed higher on Tuesday, November 9, in mixed volume. S&P 500 and NASDAQ Composite traded in lower volume. Major indices declined at the open and then mostly traded sideways to down after 10:00 AM.

From Briefing.com:

The S&P 500 declined 0.4% on Tuesday, snapping an eight-session winning streak amid profit-taking interest and another decline in Treasury yields. The Nasdaq Composite snapped an 11-session winning streak with a 0.6% decline. The Russell 2000 also fell 0.6% while the Dow Jones Industrial Average fell 0.3%. […]

The information technology (-0.4%), financials (-0.6%), health care (-0.4%), and communication services (-0.3%) sectors closed modestly lower, while the six other sectors in the S&P 500 provided offsetting support with 0.3-0.4% gains. The utilities sector (+0.4%) eked out the top spot.

[…]

The 2-yr yield fell five basis points to 0.40%, and the 10-yr yield fell seven basis points to 1.43%. The U.S. Dollar Index declined 0.1% to 93.97. WTI crude futures rose 2.7%, or $2.20, to $84.16/bbl.

[…]
  • The Producer Price Index for final demand increased 0.6% month-over-month in October (Briefing.com consensus +0.6%) and the index for final demand, less foods and energy, increased 0.4% (Briefing.com consensus +0.4%).
  • […]
  • The NFIB Small Business Optimism Index for October decreased to 98.2 from 99.1 in September.
[…]
  • S&P 500 +24.7% YTD
  • Nasdaq Composite +23.3% YTD
  • Russell 2000 +22.9% YTD
  • Dow Jones Industrial Average +18.7% YTD

Overseas: 

  • Europe: DAX flat, FTSE -0.4%, CAC -0.1%
  • Asia: Nikkei -0.8%, Hang Seng +0.2%, Shanghai +0.2%

Commodities: 

  • Crude Oil +1.99 @ 84.15
  • Nat Gas -0.44 @ 5.06
  • Gold +3.10 @ 1830.60
  • Silver -0.24 @ 24.30
  • Copper -0.04 @ 4.37
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