Market Remarks

Morning Notes – Friday, September 16, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM; declining since 4:00 PM – down more than 25 points since 6:45 AM
  • The odds are for a down day with elevated volatility – watch for a break above 3894.00 for a change of sentiments
  • The key economic data report due during the day:
    • Prelim UoM Consumer Sentiments ( 60 est.; prev. 58.2) at 10:00 AM
    • Prelim UoM Inflation Expectations ( prev. 4.8% ) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3844.49, 3818.63, and 3801.10
  • Critical resistance levels for S&P 500 are 3888.28, 3911.06, and 3945.12
  • Key levels for E-mini futures: break above 3965.50, the high of 8:45 AM and a break below 3929.00, the low of 3:30 PM on Wednesday

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (December 2022) closed at 3918.75, and the index closed at 3901.35 – a spread of about +18.50 points; the futures closed at 3919.25; the fair value is -0.50
  • Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -54.75, Dow by -413, and NASDAQ by -170.75

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • EUR/USD
  • USD/JPY
  • USD/CAD
  • INR/USD
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are mixed
    • Industrial metals are higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.459%, up +19.4 basis points from two weeks ago;
    • The 30-year is at 3.480%, up +10.6 basis points;
    • The 2-year yield is at 3.867%, up +35.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.408, down from -0.251
    • The 30-Year-&-10-Year spread is at 0.021, down from 0.109
  • VIX
    • At 27.72 @ 9:00 AM; up from the last close; above the 5-day SMA;
    • Recent high = 29.06 on July 13; low = 21.67 on August 26
    • Sentiment: Risk-Off

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 red Spinning Top candle at the previous day’s low
    • Stochastic (9, 1, 3): %K is below %D; below 20
    • RSI-9 is below 40; below 8-day EMA;
  • Below 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Resumed downtrend after a sideways move on Wednesday;
  • RSI-21 is just above 20
    • Below EMA20, which is Below EMA10 of EMA50
  • Bias: Down
30-Minute (E-mini futures)
  • Declining since 10:00 AM on Thursday after forming a pennant following a sharp down move on Tuesday – the 61.8% extension target is near 3830.00, the 100% extension target is near 3741.00, and the 161.8% extension target is near 3594.84
    • RSI-21 is around 30
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 11:00 PM
  • The Bollinger Band is expanding a bit since 6:45 AM, with price walking down the lower band
  • Bias: Down

Previous Session

Major U.S. indices closed lower on Thursday, September 15, in higher volume. The major indices opened higher but then turned around and traded lower for the rest of the day.

From Briefing.com:

[…]

The major indices oscillated around a fairly narrow range throughout the afternoon until the S&P 500 fell below the 3,900 level.

[…]

The Vanguard Mega Cap Growth ETF (MGK) closed down 1.7%; the Invesco S&P 500 Equal Weight ETF (RSP) closed down 0.8%; the S&P 500 closed down 1.1%.

Many stocks were under pressure today as nine of the 11 S&P 500 sectors closed in the red. Only health care (+0.6%) and financials (+0.3%) could squeeze out a gain while energy (-2.5%), utilities (-2.5%), and information technology (-2.4%) brought up the rear.

[…]

WTI crude oil futures settled down 3.9% to $85.11/bbl and natural gas futures fell 8.6% to $8.31/mmbtu.

[…]

Treasury yields rose noticeably today. The 2-yr note yield rose 11 basis points to 3.87% and the 10-yr note yield rose five basis points to 3.46%.

[…]
  • Aug Retail Sales 0.3% vs Briefing.com consensus of 0.0%; prior was -0.4% revised from 0.0%
  • […]
  • Aug Retail Sales ex-auto -0.3% vs Briefing.com consensus of 0.0%; prior was 0.0% revised from 0.4%
  • 09/10 Initial Claims 213K vs Briefing.com consensus of 233K; prior was 218K revised from 222K
  • […]
  • 09/03 Continuing Claims 1403K; prior was 1401K revised from 1473K
  • Sep Empire State Manufacturing -1.5 vs Briefing.com consensus of -13.5; prior was -31.3
  • Sep Philadelphia Fed Index -9.9 vs Briefing.com consensus of 3.0; prior was 6.2
  • Aug Import Prices -1.0; prior was -1.5% revised from -1.4%
  • Aug Import Prices ex-oil -0.2%; prior was -0.5%
  • Aug Export Prices -0.016; prior was -0.037 revised from -0.033
  • Aug Export Prices ex-ag. -0.018; prior was -0.038 revised from -0.033
  • Aug Industrial Production -0.002 vs Briefing.com consensus of 0; prior was 0.005 revised from 0.006
  • Aug Capacity Utilization 0.8 vs Briefing.com consensus of 0.803; prior was 0.802 revised from 0.803

Dow Jones Industrial Average: -14.8% YTD
S&P 400: -15.1% YTD
S&P 500: -18.2% YTD
Russell 2000: -18.7% YTD
Nasdaq Composite: -26.2% YTD

Overseas: 

  • Europe: DAX -0.6%, FTSE +0.1%, CAC -1.0%
  • Asia: Nikkei +0.2%, Hang Seng +0.4%, Shanghai -1.2%

Commodities: 

  • Crude Oil -3.47 @ 85.11
  • Nat Gas -0.78 @ 8.31
  • Gold -34.20 @ 1674.30
  • Silver -0.37 @ 19.20
  • Copper -0.04 @ 3.48
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