Market Remarks

Morning Notes – Friday, February 24, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:15 AM; declined more than 30 points since 1:45 AM;
  • The odds are for a down day with elevated volatility – watch for a break above 4019.00 for a change of sentiments
  • The major economic data report is due during the day:
    • Core PCE Price Index ( 0.6% vs. 0.4% est.; prev. 0.4%) at 8:30 AM
    • Personal Income ( 0.6% vs. 1.0% est.; prev. 0.3%) at 8:30 AM
    • Personal Spending ( 1.8% vs. 1.4% est.; prev. -0.1%) at 8:30 AM
    • New Home Sales ( 620K est.; prev. 616K) at 10:00 AM
    • Revised UoM CXonsumer Sentiment (66.4 est.; prev. 66.4) at 10:00 AM
    • Revised UoM Inflation Expectation ( prev.; 4.2%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3969.19, 3964.95, and 3949.06
  • Critical resistance levels for S&P 500 are 4005.03, 4028.30, and 4035.40
  • The key levels for E-mini futures are a break above 4019.00, the high at 10:30 PM on Thursday, and a break below 3982.00, the low at 1:15 PM on Thursday

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (March 2023) closed at 4018.75, and the index closed at 4012.32 – a spread of about +9.50 points; the futures closed at 4018.75; the fair value is 0.0
  • Pre-NYSE session open, futures were lower – at 7:00 AM, S&P 500 futures were down by -25.50, Dow by -182, and NASDAQ by -114.25

Markets Around The World

  • Markets in the East closed mixed
  • European markets are mixed
  • 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 lower
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.879, up +19.6 basis points from two weeks ago;
    • The 30-year is at 3.877%, up +13.3 basis points;
    • The 2-year yield is at 4.695%, up +20.3 basis points;
    • The 10-Year-&-2-Year spread is at -0.816, up from -0.809
    • The 30-Year-&-10-Year spread is at -0.002, down from 0.061
  • VIX
    • At 21.75 @ 8:45 AM; up from the last close; at/below the 5-day SMA;
    • Recent high = 25.84 on December 13, 2022; low = 18.11 on February 15
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on February 17 was a small red candle that looked like a Doji with a small lower shadow and a relatively large upper shadow.
    • Stochastic (9,1, 3): %K crossed below the %D;
    • RSI-9 is just below 60
  • The week was down -11.37 or 0.3%; the 5-week ATR  is 136.49
  • A down week, third in the last five weeks, and sixth  in the previous ten weeks;
  • The weekly pivot point=4095.60, R1=4143.26, R2=4207.26; S1=4031.44, S2=3983.78; R1 pivot level was breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A red Doji candle with almost no upper shadow and a long lower shadow that breached the high and low of the previous day’s candle; at the uptrend line from October 13, 2022 low.
    • Stochastic (9, 1, 3): %K crossed above %D from near zero;
    • RSI-9 moved above 40 from around 35; below 8-DMA
  • Below 20-day EMA; at/above 50-day EMA; above 100-day SMA and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Trending down since the high of 4208.50 reached at 2:00 PM on February 2 – lower lows and lower highs; broke below a symmetrical triangle – the 100% extension target near 3990.00 is achieved, and the 161.8% extension target is near 3898.00; moving sideways since 2:00 PM on February 21
    • RSI-21 has declined to 35 from above 50
    • Below EMA20, which is below EMA10 of EMA50
  • Bias:  Down-Side
30-Minute (E-mini futures)
  • Moving Sideways since 1:00 PM on February 21 between 4035.00 and 3973.00
    • RSI-21 has declined to near 30
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 9:45 PM
  • The Bollinger Band has been expanding since 1:45 AM, with the price walking down the lower band
  • Bias: Down

Previous Session

Major U.S. indices closed higher on Thursday, February 23, in mixed volume. Dow Jones Industrial Average and Russell 200 traded in lower volume.

The major indices opened higher and made the day’s high in the opening minutes of trading. The main indices traded lower after opening and reached below the previous day’s low by Noon, when they turned around and traded higher for the rest of the day. Most made long-legged Doji or similar indecisive candlestick formations.

From Briefing.com:

[…]

Today’s trade started, and ended, on a more upbeat note.

[…]

The main indices did, however, spend a good portion of today’s session pinned below their flat lines

[…]

The downside moves today had the S&P 500 fall below the 4,000 level, then its 50-day moving average at 3,980.

[…]

Most of the 11 S&P 500 sectors logged a gain today led by information technology (+1.6%) and energy (+1.3%). The communication services (-0.7%) and utilities (-0.5%) sectors, meanwhile, fell to the bottom of the pack.

[…]

The 10-yr note yield, which reached 3.97% earlier, settled the session down four basis points to 3.88%. The 2-yr note yield fell one basis point to 4.69%.

  • Nasdaq Composite: +10.7% YTD
  • Russell 2000: +8.3% YTD
  • S&P Midcap 400: +7.7% YTD
  • S&P 500: +4.5% YTD
  • Dow Jones Industrial Average: UNCH YTD
[…]
  • Initial jobless claims for the week ending February 18 declined by 3,000 to 192,000 (Briefing.com consensus 200,000). Continuing jobless claims for the week ending February 11 decreased by 37,000 to 1.654 million.
  • […]
  • The second estimate for fourth quarter GDP showed a downward revision to 2.7% growth (Briefing.com consensus 2.9%) from the advance estimate of 2.9%. That was driven by a downward revision in personal spending growth to 1.4% from 2.1%. The GDP Price Deflator was revised up to 3.9% (Briefing.com consensus 3.5%) from 3.5%. The personal consumption expenditures index, meanwhile, was revised up to 3.7% from 3.2%.
  • […]
  • Weekly EIA crude oil inventories showed a build of 7.65 million barrels following last week’s build of 16.28 million barrels.
  • Weekly EIA Natural Gas Inventories showed a draw of 71 bcf versus a draw of 100 bcf last week.
[…]

Overseas: 

  • Europe: DAX +0.5%, FTSE -0.3%, CAC +0.3%
  • Asia: Nikkei market closed, Hang Seng -0.4%, Shanghai -0.1%

Commodities: 

  • Crude Oil +1.48 @ 75.37
  • Nat Gas +0.13 @ 2.30
  • Gold -13.50 @ 1827.50
  • Silver -0.34 @ 21.29
  • Copper -0.15 @ 4.04
Exit mobile version