Market Remarks

Morning Notes – Wednesday, June 15, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moved up more than 35 points since 1:15 AM
  • The odds are for an up day with elevated volatility – watch for a break below 3752.25 for a change of sentiments
  • The key economic data report due during the day:
    • Retail Sales ( -0.3% vs. 0.1% est.; 0.7%) at 8:30 AM
    • Core Retail Sales ( 0.5% vs. 0.7% est.; prev. 0.4%) at 8:30 AM
    • Empire States Manufacturing Index ( -1.2 vs. 2.4 est.; prev. -11.6) at 8:30 AM
    • Import Prices ( 0.6% vs. 1.1% est.; prev. 0.4%) at 8:30 AM
    • Business Inventories ( 1.2% est.; prev. 2.0%) at10:00 AM
    • NAHB Housing Market Index ( 67 est.; prev. 69) at 10:00 AM
    • ECB President Lagarde Speaks at 12:20 PM
    • FOMC Statement at 2:00 PM
    • Fed Funds Rate ( <1.5% est.; prev. <1.0%) at 2:00 PM
    • FOMC Press Conference at 2:30 PM

Directional Bias Before Open:

  • Weekly: In Correction
  • Daily: In Correction
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for S&P 500 are 3749.21, 3723.02, and 3705.68
  • Critical resistance levels for S&P 500 are 3778.18, 3800.25, and 3813.33
  • Key levels for E-mini futures: break above 3782.00, the high at 10:00 AM on June 14 and a break below 3752.25, the low at 6:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2022) closed at 3741.75 and the index closed at 3735.48 – a spread of about +6.25 points; futures closed at 3740.25 for the day; the fair value is +1.50
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +34.75; Dow by +224; and NASDAQ by +132.75

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai and Hong Kong closed higher
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.483%, up +63.9 basis points from two weeks ago;
    • The 30-year is at 3.432%, up +37.5 basis points;
    • The 2-year yield is at 3.422%, up +86.9 basis points;
    • The 10-Year-&-2-Year spread is at 0.061, up from 0.291
    • The 30-Year-&-10-Year spread is at -0.051, up from 0.213
  • VIX
    • At 32.37 @ 8:30 AM; down from the last close; above the 5-day SMA;
    • Recent high = 35.48 on May 9; low = 24.94 on May 4
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on June 10 was a large Bearish Engulfing candle near the 38.2% Fibonacci retracement level of the previous rally from March 2020
    • Stochastic (9,1, 3): %K is below %D
    • RSI-9 is just above 30
  • The week was down -207.68 or -5.1%; the 5-week ATR  is 240.10
  • A down week; fourth in the least five weeks and nine in the previous ten weeks
  • The weekly pivot point=3989.93, R1=4079.71, R2=4258.55; S1=3811.09, S2=3721.31; R1/S1/S2/S3 pivot levels were breached
  • Below 10-week EMA and 39-week SMA; at/below 89-week SMA
  • In Correction
Daily
  • A red spinning top candle near the close of Monday; between two swing lows – March 4, 2021  (3723.34) and January 29, 2021 (3694.12) 
    • Stochastic (9, 1, 3): %K is above %D; below 5
    • RSI-9 is just above 25; below 8-day EMA;
  • Below 20-day EMA; below 50-day EMA, 200-day SMA, and 100-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Broke below the May 20 and is moving just below a lower limit of a Horizontal Channel
    • RSI-21 bounced up above 50 from near 10
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Moving sideways to down to up since 4:00 AM on Monday near the lows of March 2021; forming a rounding bottom pattern
    • RSI-21 has drifted up above 50 from below 40
    • Above EMA20, which is at/above EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting up since 6:00 PM
  • The Bollinger Band is relatively narrow
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Tuesday, June 14, in lower volume. NASDAQ Composite and Dow Jones Transportation Average closed higher.

Most major indices made small red spinning top candles near the close of the previous day. gapped down at the open and did not close the gap. Thee have been two such gap-down days for the market. Most major indices broke below the recent lows. NASDAQ Composite made a red Harami candle and the Transports made a green Inverted Hammer candle near the high of the previous day.

From Briefing.com:

[…]

The 2-yr note yield settled the session up 16 basis points at 3.43% and the 10-yr note yield settled the session up 12 basis points at 3.48%.

[…]

The only other sector that eked out a win was the energy sector (+0.1%), but that was a hollow victory considering it was up as much as 3.2% earlier in the day.

[…]

Separately, the Dow Jones Transportation Average (+2.1%) had a standout day,

[…]

The main laggards of note today were the utilities (-2.6%), consumer staples (-1.3%), health care (-1.1%), real estate (-1.0%), and financial (-0.9%) sectors.

[…]
  • The May NFIB Small Business Optimism Index checked in at 93.1 versus 93.2 in April.
  • The PPI for final demand increased 0.8% month-over-month in May (Briefing.com consensus 0.8%) following a downwardly revised 0.2% increase (from 0.5%) in April. The index for final demand, less foods and energy, rose 0.5% (Briefing.com consensus 0.6%) following a downwardly revised 0.2% increase (from 0.4%) in April. On a year-over-year basis, the PPI for final demand was up 10.8%, versus 10.9% in April, and the index for final demand, less foods and energy, was up 8.3%, versus 8.6% in April.
[…]
  • Dow Jones Industrial Average: -16.5% YTD
  • S&P 400: -19.6% YTD
  • S&P 500: -21.6% YTD
  • Russell 2000: -23.9% YTD
  • Nasdaq Composite: -30.8% YTD

Overseas: 

  • Europe: DAX -0.9%, FTSE -0.3%, CAC -1.2%
  • Asia: Nikkei -1.3%, Hang Seng 0.0%, Shanghai +1.0%

Commodities: 

  • Crude Oil -2.63 @ 118.33
  • Nat Gas -1.32 @7.28
  • Gold -19.10 @ 1813.00
  • Silver -0.32 @ 20.93
  • Copper -0.08 @ 4.13
Exit mobile version