Market Remarks

Morning Notes – Monday, September 12, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:00 AM; moving down since 5:15 AM; down more than 15 points
  • The odds are for an up to a sideways day with elevated volatility – watch for a break below 4095.50 and break above 4115.00 for clarity
  • No key economic data report is due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4074.94, 4067.37, and 4045.97
  • Critical resistance levels for S&P 500 are 4090.24, 4100.91, and 4111.92
  • Key levels for E-mini futures: break above 4115.00, the high at 5:15 AM and a break below 4095.50, the low at 4:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2022) closed at 4085.50, and the index closed at 4067.36 – a spread of about +18.25 points; the futures closed at 4085.50; the fair value is +0.00
  • Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +23.50, Dow by +103, and NASDAQ up by +85.50

Markets Around The World

  • Markets in the East closed higher – Shanghai, Hong Kong, and Seoul were closed
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • EUR/USD
  • USD/JPY
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are mixed
    • Industrial metals are higher
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.321%, up +28.6 basis points from two weeks ago;
    • The 30-year is at 3.456%, up +25.1 basis points;
    • The 2-year yield is at 3.560%, up +17.6 basis points;
    • The 10-Year-&-2-Year spread is at -0.239, up from -0.349
    • The 30-Year-&-10-Year spread is at 0.135, down from 0.170
  • VIX
    • At 23.37 @ 6:30 AM; down from the last close; below the 5-day SMA;
    • Recent high = 27.69 on August 30; low = 21.67 on August 26
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on September 9 was a Bullish Engulfing candle with almost no upper shadow and small lower shadow;
    • Stochastic (9,1, 3): %K crossed above %D
    • RSI-9 is just below 50
  • The week was up + 149.10 or +3.6%; the 5-week ATR  is 159.04
  • An up week; second in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=4010.31, R1=4133.86, R2=4200.37; S1=3943.80, S2=3820.25; R1 pivot level was breached
  • Above 10-week EMA, below 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A green candle with almost no upper and lower shadows that gapped up the open
    • Stochastic (9, 1, 3): %K is above %D; above 90
    • RSI-9 is just above 50; above 8-day EMA;
  • Above 20-day EMA, 50-day EMA, and 100-day SMA; below 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Bouncing off from 3883.50 at 8:00 PM on September 6; near a resistance level that was a support earlier
    • RSI-21 is above 80
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Trending up since 8:30 PM on September 6;
    • RSI-21 is moving around 65
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 2:15 AM
  • The Bollinger Band is contracting a bit
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, September 9, in mostly lower volume. NASDAQ Composite traded in lower volume. The major indices gapped up at the open and then mostly traded higher during the day.

For the week, the major indices closed higher. Asian and European markets closed mostly higher. The dollar index closed lower, the energy futures were down, the hard commodities were up, and most soft commodities were up for the week. The US Treasury yields inched up.

From Briefing.com:

[…]

The major indices finished near their best levels of the day on relatively light volume; meanwhile, the S&P 500 and Nasdaq Composite reclaimed a posture back above their 50-day moving averages.

[…]

All 11 S&P 500 sectors ended in positive territory with gains ranging from 0.4% (utilities) to 2.5% (communication services).

[…]

Advancers led decliners by a 5-to-1 margin at the NYSE and by a better than 2-to-1 margin at the Nasdaq.

[…]

The lone economic release today was July Wholesale Inventories, which were up 0.6% month-over-month (Briefing.com consensus +0.8%) versus a 1.8% gain in June.

[…]
  • Dow Jones Industrial Average: -11.4% YTD
  • S&P 400: -12.1% YTD
  • S&P 500: -14.7% YTD
  • Russell 2000: -16.1% YTD
  • Nasdaq Composite: -22.6% YTD
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