Morning Notes – Monday, February 13, 2023

Sunil Sharma

2 years ago

Directional Bias For The Day:

S&P Futures are little changed at 9:15 AM, moved down more than 10 points from the 7:30 AM high of 4115.00
The odds are for an up-to-sideways day with elevated volatility – watch for a break above 4115.00 and a break below 4096.25 for clarity
No major economic data report is due during the day

Directional Bias Before Open:

Weekly: Uptrend
Daily: Uptrend
120-Min: Side-Down

30-Min: Side
15-Min: Side-Up
6-Min: Up-Side

Key Levels:

Critical support levels for S&P 500 are 4077.79, 4063.18, and 4060.79
Critical resistance levels for S&P 500 are 4100.00, 4115.31, and 4132.05
The key levels for E-mini futures are a break above 4115.00, the high at 7:30 AM, and a break below 4096.25, the low at 5:15 AM

Pre-Open

On Friday at 4:00 PM, S&P futures (March 2023) closed at 4100.00, and the index closed at 4090.46 – a spread of about +9.50 points; the futures closed at 4099.75; the fair value is +0.25
Pre-NYSE session open, futures were mixed – at 8:45 AM, S&P 500 futures were up by +3.00, Dow down by -25, and NASDAQ up by +36.25

Markets Around The World

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

Up	Down
Dollar index USD/JPY USD/CHF USD/CAD INR/USD	EUR/USD GBP/USD AUD/USD NZD/USD

Commodities (Compared to two weeks ago):
- Energy futures are mixed
- Precious metals are lower
- Industrial metals are lower
- Soft commodities are mostly higher
Treasuries (Compared to two weeks ago)
- The 10-year yield closed at 3.744, up +22.6 basis points from two weeks ago;
- The 30-year is at 3.827%, up +19.4 basis points;
- The 2-year yield is at 4.511%, up +31.2 basis points;
- The 10-Year-&-2-Year spread is at -0.767, down from -0.681
- The 30-Year-&-10-Year spread is at 0.083, down from 0.115
VIX
- At 21.37 @ 8:30 AM; up from the last close; above the 5-day SMA;
- Recent high = 23.76 on January 3; low = 17.06 on February 2
- Sentiment: Risk-Neutral-Off

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

Weekly:	The week ending on February 10 was a Spinning Top red Harami candle near a resistance created by the gap-down move of the week of August 22, 2022 Stochastic (9,1, 3): %K crossed below the %D; RSI-9 is around 60 The week was down -46.02 or 11.1%; the 5-week ATR is 139.46 A down week, second in the last five weeks, and sixth in the previous ten weeks; The weekly pivot point=4109.26, R1=4157.74, R2=4225.01; S1=4041.99, S2=3993.51; No pivot levels were breached Above 10-week EMA and 39-week SMA; below 89-week SMA Uptrend
*Daily*	A small green candle near the close of the previous day’s large red candle; the daily bias is down Stochastic (9, 1, 3): %K is below %D; RSI-9 has declined to just above 50; below 8-DMA Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA; Uptrend Under Pressure
*2-Hour (E-mini futures)*	The uptrend since January 19 is in danger of reversing; near the lower band of a symmetrical triangle; down more than 100 points after finding resistance at 4180.00, the high of December 13, 2022; bouncing up since 10:00 AM on Friday. RSI-21 has bounced up to above 50 from below 25 Above EMA20, but below EMA10 of EMA50 Bias: Side-Down
*30-Minute (E-mini futures)*	Rising since 7:30 AM on Friday – up more than 50 points; broke below a support level around 4100.00 on Thursday – 61.8% extension target is near 4050.00, and the 100% extension target is near 4020.00; the cash index broke below a symmetrical triangle on the 30-minute chart – the 61.8% extension target is near 4010.00, and the 100% extension target is near 3950.00 – the futures are 10-12 points above the cash index. RSI-21 has bounced to below 60 Above EMA20, which is Above EMA10 of EMA50 Bias: Side
*15-Minute (E-mini futures)*	The Bollinger Band (20, 2.0) has been moving up since 12:15 AM after a sideways move from 8:30 PM. The Bollinger Band is a bit expanded, and the price is declining to the middle band from the upper band. Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Friday, February 10, in mostly lower volume. The major indices opened lower and traded sideways for most of the day before climbing near then end.

For the week, the major US indices closed lower in lower volume. Most markets in Asia and Europe closed lower. The dollar index closed up, the energy futures were up, the metals were down, and soft commodities were mixed. The US Treasury yields inched up. All but one S&P sector – Energy – closed lower for the week.

From Briefing.com:

[…]
The Dow Jones Industrial Average and S&P 500 closed with modest gains while the Nasdaq finished the day with a decline.
[…]
Advancers led decliners by an 11-to-10 margin at the NYSE while decliners led advancers by roughly the same margin at the Nasdaq.
[…]
On the flip side, the energy sector (+3.9%) logged the biggest gain by a wide margin
[…]
The 10-yr note yield rose six basis points to 3.74%, losing ground after the University of Michigan Consumer Sentiment Index showed year ahead inflation expectations increasing to 4.2% from 3.9%, while the 2-yr note yield fell one basis point to 4.51%.

Nasdaq Composite: +12.0% YTD
Russell 2000: +9.0% YTD
S&P Midcap 400: +8.6% YTD
S&P 500: +6.5% YTD
Dow Jones Industrial Average: +2.2% YTD
[..]

February Univ. of Michigan Consumer Sentiment – Prelim 66.4 (Briefing.com consensus 65.0); Prior 64.9

[…]

The Treasury Budget for January showed a deficit of $38.8 bln versus a surplus of $118.7 bln a year ago. The Treasury Budget data is not seasonally adjusted, so the January deficit cannot be compared to the deficit of $85.0 bln for December.