Market Remarks

Morning Notes – Tuesday, June 13, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM. Futures swung more than 25 points following the CPI data release at 8:30 AM.
  • The odds are for an up day with elevated volatility – watch for a break below 4381.75 for a change of sentiments
  • The major economic data report due during the day:
    • CPI m/m ( 0.1% vs. 0.2% est.; prev. 0.4%) at 8:30 AM
    • Core CPI m/m ( 0.4% vs. 0.4% est.; prev. 0.4%) at 8:30 AM
    • CPI y/y (4.0% vs. 4.1% est.; prev. 4.9%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4331.97, 4314.41, and 4304.37
  • Critical resistance levels for S&P 500 are 4353.26, 4370.48, and 4385.83
  • The key levels for E-mini futures are 4407.00, the high at 8:30 AM, and 4381.75, the low at 8:30 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2023) closed at 4388.75, and the index closed at 4338.93 – a spread of about +49.75 points; the futures closed at 4388.00; the fair value is +0.75
  • Pre-NYSE session open, futures were mixed – at 8:15 AM, S&P 500 futures were up by +2.50, Dow down by -15, and NASDAQ up by +35.00

Markets Around The World

  • Markets in the East closed mostly higher –   Singapore closed lower
  • European markets are mostly higher – the UK and Spain are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • 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 3.765, up +6.5 basis points from two weeks ago;
    • The 30-year is at 3.907%, up +0.4 basis points;
    • The 2-year yield is at 4.582%, up +13.4 basis points;
    • The 10-Year-&-2-Year spread is at -0.817, down from -0.748
    • The 30-Year-&-10-Year spread is at 0.142, down from +0.203
  • VIX
    • At 14.65 @ 8:30 AM; down from the last close; above the 5-day SMA;
    • Recent high = 20.81 on May 24; low = 13.50 on June 9
    • Sentiment: Risk-On-Neutral

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

Weekly:
  • The week ending on June 9 as a small green spinning top candle indicating a bit of indecision following a break above the upper bound of a symmetrical triangle
    • Stochastic (9,1, 3): %K crossed below the %D; from above 90
    • RSI-9 is just above 70
  • The week was up +16.49 or +0.4%; the 5-week ATR  is 90.67
  • An up week, fourth in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=4294.18, R1=4327.30, R2=4355.73; S1=4265.75, S2=4232.63; No pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A green candle with almost no upper and lower shadow breaking above a resistance level created by the August 2022 high.
    • Stochastic (9, 1, 3): %K crossed above the %D; near 100
    • RSI-9 is near 75; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Broke above a Horizontal Channel between 4348.00 and 4305 – the 100% extension target near 4391.00 is achieved and the 161.8% extension target is near 4420.00
    • RSI-21 is above 80; potentially Bearish Divergence
    • Above  EMA10 of EMA50, which is at/above EMA20
  • Bias: Up
30-Minute (E-mini futures)
  • Drifting sideways to down since 12:00 AM after trending up since June 8
    • RSI-21 has been declining since 2:00 AM
    • Below EMA 20, but above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 12:00 AM
  • The Bollinger Band has been expanding since 5:30 Am, with the price walking down the lower band
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, June 12, in mixed volume. Dow Jones Industrial Average and Dow Jones Transportation Average traded in higher volume. The indices opened up and then traded higher for the rest of the day.

From Briefing.com:

[…]

Ultimately, the S&P 500 closed at its highest level since April 21, 2022, aided by chasing action and a possible fear of missing out on further gains.

[…]

The 2-yr note yield, which reached a high of 4.63% overnight, fell to 4.56% before settling the session at 4.59%. The 10-yr note yield, which reached a high of 3.79%, pulled back to 3.73% and settled at 3.77%.

[…]

The Vanguard Mega Cap Growth ETF (MGK) rose 1.5% and the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.7%. The market-cap weighted S&P 500 closed with a 0.9% gain.

Most of the S&P 500 sectors closed with a gain. Information technology (+2.1%) was the top performer by a decent margin followed by consumer discretionary (+1.7%) and communication services (+1.2%), all of which benefitted from strong mega cap constituents.

Meanwhile, the energy sector was the worst performer, down 1.0%,

[…]
  • Nasdaq Composite: +28.6% YTD
  • S&P 500: +13.0% YTD
  • Russell 2000: +6.4% YTD
  • S&P Midcap 400: +5.1% YTD
  • Dow Jones Industrial Average: +2.8% YTD
[…]

Overseas:

  • Europe: DAX +0.9%, FTSE +0.1%, CAC +0.5%
  • Asia: Nikkei +0.5%, Hang Seng +0.1%, Shanghai -0.1%

Commodities: 

  • Crude Oil -3.21 @ 67.09
  • Nat Gas +0.02 @ 2.28
  • Gold -8.30 @ 1968.80
  • Silver -0.34 @ 24.06
  • Copper -0.03 @ 3.75
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