Morning Notes – Friday, June 16, 2023

Directional Bias For The Day:

• S&P Futures are higher at 8:30 AM. Moving up since 10:15 PM from a low of 4459.75 to 4485.50, the high of Thursday, forming a cup pattern.
• The odds are for an up – watch for a break below 4468.75 for a change of sentiments
• The major economic data report due during the day:
  • Prelim UoM Consumer Sentiment (60.1 est.; prev. 59.2) at 10:00 AM
  • Prelim UoM Inflation Expectations ( prev. 4.2%) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4421.96, 4413.56, and 4402.41
• Critical resistance levels for S&P 500 are 4439.00. 4456.18, and 4480.55
• The key levels for E-mini futures are 4485.50, the high at 2:45 PM on Thursday, and 4468.75, the low at 6:45 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (September 2023) closed at 4472.75, and the index closed at 4425.84 – a spread of about +47.00 points; the futures closed at 4471.25; the fair value is +1.00
• Pre-NYSE session open, futures were higher – at 8:15 AM, S&P 500 futures were up by +6.50, Dow by +26, and NASDAQ by +53.50

Markets Around The World

• Markets in the East closed higher
• European markets are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are higher
  • Precious metals are lower
  • Industrial metals are mostly higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.728, up +12.0 basis points from two weeks ago;
  • The 30-year is at 3.848%, up +1.5 basis points;
  • The 2-year yield is at 4.650%, up +31.3 basis points;
  • The 10-Year-&-2-Year spread is at -0.922, down from -0.729
  • The 30-Year-&-10-Year spread is at 0.120, down from +0.225
• VIX
  • At 14.40 @ 6:30 AM; up from the last close; below 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:

Previous Session

Major U.S. indices closed higher on Thursday, June 15, in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in lower volume. The indices opened higher and then moved higher for the rest of the day. The major indices are breaking away to the upside from either bullish chart patterns or congestion areas. All S&P sectors closed higher.

From Briefing.com:

[…] Ultimately, the major indices all closed near their highs of the day, which had the S&P 500 above 4,400 and the Dow Jones Industrial Average up by more than 400 points. […] The 2-yr note yield was down six basis points to 4.64%. The 10-yr note yield was down seven basis points to 3.73%. The drop in market rates was a big support factor for equities today. […] All 11 S&P 500 sectors closed with gains and seven of them rose by more than 1.0%. The health care (+1.6%) and communication services (+1.5%) sectors led the pack. Meanwhile, the real estate (+0.3%) and consumer discretionary (+0.7%) sectors logged the slimmest gains. […] Nasdaq Composite: +31.7% YTD S&P 500: +15.3% YTD Russell 2000: +7.3% YTD S&P Midcap 400: +6.6% YTD Dow Jones Industrial Average: +3.8% YTD […] Total retail sales increased 0.3% month-over-month in May (Briefing.com consensus 0.0%). Excluding autos, retail sales increased 0.1% month-over-month (Briefing.com consensus +0.1%). […] Initial jobless claims for the week ending June 10 were unchanged at 262,000 (Brieifng.com consensus 251,000). Continuing jobless claims for the week ending June 3 increased by 20,000 to 1.775 million. […] The June Philadelphia Fed Index slumped to -13.7 (Briefing.com consensus -13.0) from -10.4 in May. […] The June Empire State Manufacturing Survey surged to 6.6 (Briefing.com consensus -16.0) from -31.8 in May. […] May import prices declined 0.6% month-over-month following a downwardly revised 0.3% increase (from 0.4%) in April. Excluding fuel, import prices were down 0.1% following an unchanged reading for April. Export prices declined 1.9% month-over-month following a downwardly revised 0.1% decline (from 0.2%) in April. Excluding agricultural products, export prices declined 1.8% following a downwardly revised 0.1% decline (from 0.2%) in April. […] Total industrial production declined 0.2% month-over-month in May (Briefing.com consensus +0.1%) following an unrevised 0.5% increase in April. The capacity utilization rate slipped to 79.6% (Briefing.com consensus 79.7%) from an upwardly revised 79.8% (from 79.7%) in April. […] Business inventories rose 0.2% in April (Briefing.com consensus 0.2%) following a revised 0.2% decline in March (from -0.1%). The weekly EIA natural gas inventories showed a build of 84 bcf versus a build of 104 bcf last week. […] Overseas: Europe: DAX -0.1%, FTSE +0.3%, CAC -0.5% Asia: Nikkei -0.1%, Hang Seng +2.2%, Shanghai +0.7% Commodities:  Crude Oil +2.46 @ 70.69 Nat Gas +0.21 @ 2.55 Gold +2.50 @ 1971.50 Silver -0.16 @ 23.95 Copper +0.03 @ 3.90