Market Remarks

Morning Notes – Wednesday, January 25, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM; broke below a Double Bottom low – the 100.0% extension target near 3986.00 is achieved, and the 161.8% extension target is near 3980.00
  • The odds are for a down day with elevated volatility – watch for a break above 3998.00 and a break above 4006.75 for a change of sentiments.
  • No major economic data report is due during the day.

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3971.64, 3961.28, and 3951.22
  • Critical resistance levels for S&P 500 are 3989.79, 4005.98, and 4023.92
  • The key levels for E-mini futures are a break above 3998.00, the high at 8:30 AM, and a break below 3980.25, the low at 8:00 AM on Monday

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2023) closed at 4030.50, and the index closed at 4016.95 – a spread of about +13.50 points; the futures closed at 4032.75; the fair value is -2.25
  • Pre-NYSE session open, futures were lower – at 8:45 AM, S&P 500 futures were down by -41.50, Dow by -272, and NASDAQ by -188.00

Markets Around The World

  • Markets in the East closed mixed – Tokyo, Seoul, and Singapore closed up; Sydney and Mumbai closed down; Shanghai, and Hong Kong, were closed
  • European markets are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.442, down -17.9 basis points from two weeks ago;
    • The 30-year is at 3.600%, down -15.7 basis points;
    • The 2-year yield is at 4.151%, down -11.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.709, down from -0.641
    • The 30-Year-&-10-Year spread is at 0.158, up from 0.136
  • VIX
    • At 20.09 @ 8:00 AM; up from the last close; above the 5-day SMA;
    • Recent high = 23.76 on January 3; low = 18.01 on January 13
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on January 20 was a small red candle with a small upper shadow and a long lower shadow
    • Stochastic (9,1, 3): %K is above %D; just below 60;
    • RSI-9 is around 55
  • The week was up +104.01 or +2.7%; the 5-week ATR  is 142.86
  • A down week, third in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=3957.85, R1=4030.15, R2=4087.70; S1=3900.30, S2=3828.00; S1 pivot level was breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Under Pressure
Daily
  • A small red Harami candle with small upper and lower shadows; at the downtrend line from January 2022 high
    • Stochastic (9, 1, 3): %K is above %D; above 80
    • RSI-9 is near 65; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Drifting down since 12:00 PM on Monday from a high of 4056.75 to near 3990.00
    • RSI-21 has declined to below 30 from above 90
    • Above EMA20, which is above EMA10 of EMA50 
  • Bias:  Side-Down
30-Minute (E-mini futures)
  • Trending down since 1:30 PM on Monday – down more than 60 points
    • RSI-21 has drifted to just above 30 from above 80
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 4:30 AM
  • The Bollinger Band has been expanding since 4:30 AM with price walking down the lower band
  • Bias: Down

Previous Session

Major U.S. indices closed mostly lower on Tuesday, January 24, in lower volume. Dow Jones Industrial Average closed a bit higher. Major indices opened lower, and after recovering a little in the first hour of trading following volatile swings, they moved sideways for the rest of the day. Most made small Harami or similar indecisive candles.

From Briefing.com:

[…]

The NYSE will declare a number of trades as erroneous from this morning and some trades will be busted that traded outside of trading bands, according to CNBC.

[…]

Entering today, the Nasdaq Composite was up 8.6% for the year and the S&P 500 was up 4.7%.

[…]

The S&P 500 was able to maintain its posture above the 4,000 level for most of the session, albeit on very light volume at the NYSE, and the Dow Jones Industrial Average was able to close with a gain of 0.3%.

[…]

Separately, Treasury yields pulled back today. The 2-yr note yield fell four basis points to 4.19% and the 10-yr note yield fell six basis points to 3.47%.

  • Nasdaq Composite: +8.3% YTD
  • Russell 2000: +7.1% YTD
  • S&P Midcap 400: +6.2% YTD
  • S&P 500: +4.6% YTD
  • Dow Jones Industrial Average: +1.8% YTD
[…]

Overseas: 

  • Europe: DAX -0.1%, FTSE -0.4%, CAC +0.3%
  • Asia: Nikkei +1.5%, Hang Seng closed for holiday, Shanghai closed for holiday

Commodities: 

  • Crude Oil -1.34 @ 80.23
  • Nat Gas -0.17 @ 3.05
  • Gold +6.50 @ 1936.10
  • Silver +0.19 @ 23.77
  • Copper -0.01 @ 4.25
Exit mobile version