Market Remarks

Morning Notes – Wednesday, November 23, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:45 AM, declining since 7:30 AM; down more than ten points
  • The odds are for a down day with elevated volatility – watch for a break above 4013.75 for a change of sentiments;
  • The key economic data report is due during the day:
    • Durable Goods Orders (1.0% vs. 0.4% est.; prev. 0.4%) at 8:30 AM
    • Core Durable Goods Orders ( 0.5% vs. 0.0% est.; prev. -0.5%) at 8:30 AM
    • Unemployment Claims (249K vs. 225LK est.; prev. 222K) at 8:30 AM
    • Flash Services PMI ( 48.0 est.; prev. 47.8) at 9:45 AM
    • Flash Manufacturing PMI ( 50.0 est.; prev. 50.4) at 9:45 AM
    • New Home Sales ( 570K est.; prev. 603K) at 10:00 AM
    • Revised UoM Consumer Sentiment ( 55.0 est.; prev. 54.7) at 10:00 AM
    • Revised UoM Inflation Expectations (prev. 5.1%) at 10:00 AM
    • FOMC Meeting Minutes at 2:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3996.59, 3986.58, and 3971.10
  • Critical resistance levels for S&P 500 are 4005.88, 4028.37, and 4037.12
  • Key levels for E-mini futures: break above 4013.75, the high at 8:30 AM, and a break below 4002.00, the low of 8:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2022) closed at 4010.00, and the index closed at 4003.58 – a spread of about +6.50 points; the futures closed at 4010.25; the fair value is -0.25
  • Pre-NYSE session open, futures are lower a bit – at 8:30 AM, S&P 500 futures were down by -0.75, Dow by -17, and NASDAQ by -4.25

Markets Around The World

  • Markets in the East closed mostly higher – Singapore closed lower; Tokyo was closed for trading
  • European markets are mixed – the UK, Switzerland, and STOXX 600 are higher; Germany, France, and Italy are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • 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 3.761%, down -36.5 basis points from two weeks ago;
    • The 30-year is at 3.808%, down -45.0 basis points;
    • The 2-year yield is at 4.508%, down -15.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.747, down from -0.533
    • The 30-Year-&-10-Year spread is at 0.047, up from 0.132
  • VIX
    • At 21.68 @ 8:00 AM; up from the last close; below the 5-day SMA;
    • Recent high = 26.59 on November 10; low = 19.12 on August 12
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on November 18 was a Doji with the real body just below the previous week’s close;
    • Stochastic (9,1, 3): %K is above %D;
    • RSI-9 is above 50
  • The week was down -27.59 or -0.7%; the 5-week ATR  is 187.34
  • A down week, second in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=3966.91, R1=4027.274, R2=4089.21; S1=3904.97, S2=3844.616; No pivot levels were breached
  • Below 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Resumed
Daily
  • A green candle with almost no upper and lower shadows opened higher following the past few days’  sideways price action.
    • Stochastic (9, 1, 3): %K crossed above %D
    • RSI-9 turned above 60; above 8-day EMA;
  • Above 20-day EMA, 50-day EMA, and 100-day SMA; below 200-day SMA;
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Moving up since 2:00 AM on Tuesday following a  sideways move; at the upper bound of a trading range between 4015.00 and 3930.00
    • RSI-21 is above 75
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to up since 4:00 PM on Tuesday;
    • RSI-21 is drifting lower from near 75 at 6:30 PM
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways since 1:00 AM
  • The Bollinger Band has been expanding a bit since 8:00 AM, with price waking down the lower band
  • Bias: Side-Down

Previous Session

Major U.S. indices closed higher on Tuesday, November 22, in mixed volume. S&P 500 and NASDAQ Composite traded in higher volume. The major indices opened higher and then traded higher for the rest of the day. Dow Jones Industrial Average and NYSE Composite are leading the market up.

From Briefing.com:

[…]

The major indices were on a steady climb this session that brought the S&P 500 above the 4,000 level.

[…]

Advancing issues led declining issues by a nearly 3-to-1 margin at the NYSE and a 5-to-3 margin at the Nasdaq.

All 11 S&P 500 sectors closed with gains that ranged from 0.5% (real estate) to 3.2% (energy).

[…]

The Vanguard Mega Cap Growth ETF (MGK) rose 1.5% versus a 1.4% gain in the S&P 500.

[…]

The 10-yr note yield fell seven basis points 3.76% and the U.S. Dollar Index fell 0.6% to 107.17.

[…]
  • Dow Jones Industrial Average: -6.2% YTD
  • S&P Midcap 400: -10.4% YTD
  • Russell 2000: -17.1% YTD
  • S&P 500: -16.0% YTD
  • Nasdaq Composite: -28.6% YTD

Overseas: 

  • Europe: DAX +0.3%, FTSE +1.0%, CAC +0.4%
  • Asia: Nikkei +0.6%, Hang Seng -1.3%, Shanghai +0.1%

Commodities: 

  • Crude Oil +0.99 @ 81.11
  • Nat Gas +0.29 @ 7.51
  • Gold -0.50 @ 1739.20
  • Silver +0.25 @ 21.07
  • Copper +0.03 @ 3.60
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