Morning Notes – Tuesday, July 18, 2023

/ July 18, 2023

Directional Bias For The Day:

  • S&P Futures are lower at 8:45 AM. Futures broke below an up-sloping flag at 8:30 AM following the retail sales report. The 100% extension target is near the 4535.00 level.
  • The odds are for a down day to a sideways day – watch for a break above 4555.75 or a break below 4543.25 for clarity
  • The major economic data reports due during the day:
    • Retail Sales ( 0.2% vs. 0.5% est.; prev. 0.5%) at 8:30 AM
    • Core Retail Sales ( 0.2% vs. 0.4% est.; prev. 0.3%) at 8:30 AM
    • Industrial Production ( 0.0% est.; prev. 0.2%) at 9:15 AM
    • Capacity Utilization ( 79.5% est.; prev. 79.6%) at 9:15 AM
    • Business Inventories ( 0.2% est.; prev. 0.2%) at 10:00 AM
    • NAHB Housing Market Index ( 56 est.; prev. 55) 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4514.14, 4504.90, and 4495.82
  • Critical resistance levels for S&P 500 are 4532.85, 4561.51, and 4593.45
  • The key levels for E-mini futures are 4555.75, the high at 4:30 AM, and 4543.25, the low at 10:15 AM on Monday

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2023) closed at 4554.50, and the index closed at 4522.79 – a spread of about +31.75 points; the futures closed at 4553.75; the fair value is +0.75
  • Pre-NYSE session open, futures were lower – at 8:15 AM, S&P 500 futures were down by -3.50, Dow by -21, and NASDAQ by -17.00

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo and Mumbai closed up
  • European markets are mostly lower – Switzerland and STOXX 600 are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.758, down -10.0 basis points two weeks ago;
    • The 30-year is at 3.898%, up +2.8 basis points
    • The 2-year yield is at 4.742%, down -18.3 basis points;
    • The 10-Year-&-2-Year spread is at -0.984, up from -1.067
    • The 30-Year-&-10-Year spread is at 0.140, up from +0.012
  • VIX
    • At 13.55 @ 8:00 AM; up from the last close; at/above the 5-day SMA;
    • Recent high = 21.33 on May 4; low = 12.73 on June 22
    • Sentiment: Risk-Off-Neutral

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

Weekly:
  • The week ending on July 14 was a Bullish Engulfing candle closing at the highest level since the week of April 18, 2022
    • Stochastic (9,1, 3): %K is crisscrossing the %D above 90;
    • RSI-9 has turned up above 70 but is still below the reading of the week ending on June 12, 2023.
  • The week was up +106.47 or +2.4%; the 5-week ATR  is 111.50
  • An up week, third in the last five weeks, and seventh in the previous ten weeks;
  • The weekly pivot point=4474.37, R1=4558.81, R2=4612.21; S1=4420.97, S2=4336.53; R1/R2/R3 pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A green candle with small upper and lower shadows breaking above a resistance level of around 4520.00, created by the high of April 21, 2022

    • Stochastic (9, 1, 3): %K crossed above the %D
    • RSI-9 is at 75; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Trending up since 2:00 AM on July 10 from a support level around 4410.00. Broke above a Symmetrical Triangle – the 100% extension target near 4545.00 is achieved, and the 161.8% extension target is near 4590.00.
    • RSI-21 is at 55 and is making another Bearish Divergence
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 4:00 PM on Monday after retreating a little from the high of 4565.75
    • RSI-21 is around 50
    • At/below EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sidewyas to up since 9:45 PM
  • The Bollinger Band has been expanding a little since 6:00 AM, with the price walking down the lower band.
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Monday, July 17, in mostly lower volume. Dow Jones Transportation Average closed down, and Dow Jones Industrial Average traded in higher volume. The major indices opened flat and then mostly drifted higher for the rest of the day.

Print Friendly, PDF & Email

Related posts