Morning Notes – Thursday, June 8, 2023

Directional Bias For The Day:

• S&P Futures are a little lower at 9:00 AM. Futures are within an Ascending Triangle below a resistance level around 4279.00
• The odds are for a sideways day to a down day – watch for a break above 4279.00 and a creak below 4262.75 for clarity
• The major economic data report due during the day:
  • Unemployment Claims ( 261K vs. 237=6K est.; prev. 233K) at 8:30 AM
  • Final Wholesale Inventories ( -0.2% est.; prev. -0.2%) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4263.09, 4251.09, and 4243.09
• Critical resistance levels for S&P 500 are 4276.28, 4284.60, and 4299.28
• The key levels for E-mini futures are 4279.00, the high at 8:30 AM, and 4272.75, the low at 12:45 AM

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (June 2023) closed at 4274.50, and the index closed at 4267.52 – a spread of about +7.00 points; the futures closed at 4274.25; the fair value is +0.25
• Pre-NYSE session open, futures were mixed – at 9:00 AM, S&P 500 futures were down by -2.00, Dow down by -57, and NASDAQ up by +21.25

Markets Around The World

• Markets in the East closed mixed – Shanghai, Hong Kong, and Singapore closed higher; Tokyo, Sydney, Mumbai, and Seoul closed lower
• European markets are mostly higher – the UK and Switzerland are down
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower
  • Precious metals are mixed
  • Industrial metals are mostly lower
  • Soft commodities are mixed
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.784, up +6.5 basis points from two weeks ago;
  • The 30-year is at 3.942%, down -2.3 basis points;
  • The 2-year yield is at 4.567%, up +18.6 basis points;
  • The 10-Year-&-2-Year spread is at -0.783, down from -0.662
  • The 30-Year-&-10-Year spread is at 0.158, down from +0.246
• VIX
  • At 14.04 @ 8:45 AM; up from the last close; below the 5-day SMA;
  • Recent high = 20.81 on May 24; low = 13.77 on June 7
  • Sentiment: Risk-Off-Neutral

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

Previous Session

Major U.S. indices closed mostly higher on Wednesday, June 7, in higher volume. S&P 500 and NASDAQ COmposite closed lower.

Major indices opened. The two indices that closed lower traded sideways to down, and others mostly drifted higher. Dow Jones Transportation Average led others with a gain of 2.5%, and Russell 2000 was up with a +1.8% gain.

From Briefing.com:

[…] The Russell 2000 was a winning standout again, gaining 1.8%. […] The Vanguard Mega Cap Growth ETF (MGK) fell 1.7%. […] The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.7% […] The market-cap weighted S&P 500, which ran into some resistance after hitting 4,299 in the early going, declined by a modest 0.4%. […] The SPDR S&P Regional Banking ETF (KRE) rose 3.3%. The S&P 500 energy sector (+2.7%) led its peers by a wide margin. Other top performers included the cyclical materials (+1.2%) and industrials (+1.6%) sectors. Lagging mega cap components weighed down the communication services (-1.9%), information technology (-1.6%), and consumer discretionary (-0.9%) sectors. […] The 2-yr note yield rose two basis points to 4.55% and the 10-yr note yield rose nine basis points to 3.78%. Nasdaq Composite: +25.2% YTD S&P 500: +11.2% YTD Russell 2000: +7.2% YTD S&P Midcap 400: +5.7% YTD Dow Jones Industrial Average: +1.6% YTD […] The weekly MBA Mortgage Applications Index fell 1.4% with purchase applications declining 2.0% and refinancing applications falling 1.0%. The U.S. trade deficit widened to $74.6 billion in April (Briefing.com consensus -$75.3 billion) from an upwardly revised $60.6 billion (from -$64.2 billion) in March, which was recalculated with annual revisions to the goods and services series. The widening deficit in April was the result of exports being $9.2 billion less than March exports and imports being $4.8 billion more than March imports. […] The weekly EIA Crude Oil Inventories showed a draw of 451,000 barrels after a build of 4.49 million barrels last week. Consumer credit increased by $23.0 bln in April (Briefing.com consensus $21.0 bln) following a downwardly revised $22.9 bln (from $26.5 bln) in March. […] Overseas: Europe: DAX -0.2%, FTSE -0.1%, CAC -0.1% Asia: Nikkei -1.8%, Hang Seng +0.8%, Shanghai +0.1% Commodities:  Crude Oil +0.76 @ 72.48 Nat Gas +0.08 @ 2.34 Gold -22.10 @ 1959.40 Silver -0.17 @ 23.53 Copper -0.02 @ 3.75