Morning Notes – Wednesday, September 28, 2022

Directional Bias For The Day:

• S&P Futures are higher at 9:00 AM; moving up since 5:15 AM – up more than 60 points
• The odds are for an up day with elevated volatility – watch for a break below 3633.00 for a change in sentiments
• The key economic data report is due during the day:
  • Goods Trade Balance ( -87.3B vs. -88.9B est.; prev. -90.2B) at 8:30 AM
  • Prelim Wholesale Inventories ( 1.3% vs. 0.4% est.; prev. -0.6%) at 8:30 AM
  • Pending Home Sales ( -0.9% est.; prev. -1.0%) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3635.28, 3623.29, and 3594.29
• Critical resistance levels for S&P 500 are 3659.21, 3672.24, and 3703.08
• Key levels for E-mini futures: break above 3681.00, the high of 8:45 AM and a break below 3633.00, the low of 7:15 AM

Pre-Open

• On Tuesday at 4:00 PM, S&P futures (December 2022) closed at 3661.00, and the index closed at 3647.29 – a spread of about +13.75 points; the futures closed at 3661.00; the fair value is +0.00
• Pre-NYSE session open, futures are mixed – at 9:00 AM, S&P 500 futures were up by +12.25, Dow up by +85, and NASDAQ down by -17.25

Markets Around The World

• Markets in the East closed lower
• European markets are mostly lower – Switzerland is higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower
  • Precious metals are mixed
  • Industrial metals are lower
  • Soft commodities are mostly lower
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.822%, up +40.0 basis points from two weeks ago;
  • The 30-year is at 3.752%, up +24.5 basis points;
  • The 2-year yield is at 4.287%, up +54.2 basis points;
  • The 10-Year-&-2-Year spread is at -0.465, down from -0.323
  • The 30-Year-&-10-Year spread is at -0.070, down from 0.085
• VIX
  • At 32.77 @ 9:00 AM; up from the last close; above the 5-day SMA;
  • Recent high = 35.05 on June 13; low = 22.64 on September 9
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed mixed on Tuesday, September 27, in mixed volume. NASDAQ Composite, Russell 2000, and Dow Jones Transportation Average closed higher. Dow Jones Industrial Average and NASDAQ Composite traded in lower volume.

The major indices opened higher and advanced more in the first half-hour of trading. Then declined to test the lows of Friday before rebounding in the late afternoon trading.

Dow Jones Industrial Average, Dow Jones Transportation Average, and NYSE Composite have broken below their respective June lows. S&P 500 is testing tits June lows. NASDAQ Composite, Russell 200, and Wilshire 5000 Total Market index are news their lows.

From Briefing.com:

[…] The stock market started the day in rally mode, bouncing from oversold conditions, with the Nasdaq up 2.2% and the S&P 500 up 1.7% at this morning’s highs. […] the major indices gave up their gains and spent most of the day in negative territory. The S&P 500 set a new intraday low for 2022 (3,623.29), having fallen below the June low (3,636.87) in afternoon trade. […] The 10-yr note yield sat at 3.80% before today’s open, but settled the day at 3.96%. […] The U.S. Dollar Index traded down to 113.33 this morning, as the euro and British pound rebounded; however, that rebound effort lost steam and the U.S. Dollar Index bounced back to 114.23, up 0.1%. […] Most of the S&P 500 sectors closed in the red with consumer staples (-1.8%) and utilities (-1.7%) bringing up the rear. On the flip side, energy (+1.2%) and consumer discretionary (+0.3%) sat atop the leaderboard. […] August Durable Orders fell 0.2% (Briefing.com consensus -0.1%) following the prior revised 0.1% decrease in July (from 0.0.%). Durable Orders, Excluding Transportation rose 0.2% (Briefing.com consensus 0.3%) following the prior revised 0.2% increase (from 0.3%) […] July FHFA Housing Price Index fell 0.6% after the prior 0.1% increase in June July S&P Case-Shiller Home Price Index came in at 16.1% (Briefing.com consensus 17%) after the prior 18.6% reading in June September Consumer Confidence Index rose to 108.0 (Briefing.com consensus 105.0) from prior revised reading of 103.6 (from 103.2) […] New home sales surged 28.8% month-over-month in August to a seasonally adjusted annual rate of 685,000 units (Briefing.com consensus 500,000) from an upwardly revised 532,000 (from 511,000) in July. On a year-over-year basis, new home sales were down 0.1% […] Dow Jones Industrial Average: -19.8% YTD S&P Midcap 400: -22.4% YTD S&P 500: -23.5% YTD Russell 2000: -26.0% YTD Nasdaq Composite: -30.8 YTD Overseas:  Europe: DAX -0.7%, FTSE -0.5%, CAC -0.3% Asia: Nikkei +0.5%, Hang Seng +0.0%, Shanghai +1.4% Commodities:  Crude Oil +2.14 @ 78.77 Nat Gas -0.22 @ 6.79 Gold +1.50 @ 1635.50 Silver -0.11 @ 18.34 Copper +0.01 @ 3.29