Morning Notes – Tuesday, July 11, 2023

/ July 11, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM. Moving up since 4:45 AM – up more than 15 points
  • The odds are for an up day with a good chance of  a sideways move from the pre-open levels around 4455.00
  • The major economic data reports due during the day:
    • NFIB Small Business Index ( 91.0 vs. 89.9 est.; prev. 89.4) at 5:50 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4400.25, 4389.92, and 4385.05
  • Critical resistance levels for S&P 500 are 4419.40, 4440.37, and 4452.82
  • The key levels for E-mini futures are 4457.00, the high at 8:30 AM, and 4442.25, the low at 4:45 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2023) closed at 4445.50, and the index closed at 4409.53 – a spread of about +36.00 points; the futures closed at 4444.25; the fair value is +1.25
  • Pre-NYSE session open, futures were higher – at 8:45 AM, S&P 500 futures were up by +11.25, Dow by +114, and NASDAQ by +40.00

Markets Around The World

  • Markets in the East closed higher
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are mixed
    • Industrial metals are mostly lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.006, up +28.7 basis points from two weeks ago;
    • The 30-year is at 4.043%, up +22.4 basis points
    • The 2-year yield is at 4.851%, up +10.5 basis points;
    • The 10-Year-&-2-Year spread is at -0.845, up from -1.027
    • The 30-Year-&-10-Year spread is at 0.037, down from +0.1000
  • VIX
    • At 14.87 @ 8:30 AM; down from the last close; at/below the 5-day SMA;
    • Recent high = 21.33 on May 4; low = 12.73 on June 22
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on July 7 was a red candle that declined to near the middle of the previous week’s candle
    • Stochastic (9,1, 3): %K is crisscrossing the %D above 80;
    • RSI-9 has declined to just below 70
  • The week was down -51.43 or -1.2%; the 5-week ATR  is 96.24
  • A down week, second in the last five weeks, and fourth in the previous ten weeks;
  • The weekly pivot point=4413.49, R1=4441.92, R2=4484.90; S1=4370.51, S2=4342.08; No pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A Bullish Engulfing candle over a Doji candle. The index is mostly moving sideways over the past few days after falling below a three-day island.

    • Stochastic (9, 1, 3): %K crossed above the %D;
    • RSI-9 is below 60; below 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 2:00 AM on Monday from a support level around 4410.0 – forming a Symmetrical Triangle and approaching its upper bound
    • RSI-21 has risen to above 65 after making a Hidden Divergence at 2:00 AM on Monday
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Trending higher since 3:00 AM on Monday
    • RSI-21 has advanced to near 65 from near 35
    • Above EMA 20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 5:45 AM on July 10
  • The Bollinger Band has been expanding since 2:00 AM, with the price at the upper bound after touching the lower bound earlier
  • Bias: Up

Previous Session

Major U.S. indices closed higher on Monday, July 10, in mixed volume. Dow Jones Industrial Average and NASDAQ Composite traded in higher volume.

The major indices opened up, and then drifted sideways to up within a narrow range. All but four S&P sectors – Consumer Staples, Materials, Utilities, and Communications – closed higher.

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