Morning Notes – Thursday, July 20, 2023

/ July 21, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 8:45 AM. Futures have been moving up since 15:30 PM on Thursday, making an up-sloping flag – up more than 28 points.
  • The odds are for an up day – watch for a break below 4572.50 for a change of sentiments
  • No major economic data reports is due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4527.56, 4514.59, and 4504.90
  • Critical resistance levels for S&P 500 are 4560.74, 4564.74, and 4574.66
  • The key levels for E-mini futures are 4590.75, the high at 12:15 PM on Thursday, and 4572.50, the low at 7:45 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2023) closed at 4565.50, and the index closed at 4534.87 – a spread of about +30.75 points; the futures closed at 4565.50; the fair value is +0.0
  • Pre-NYSE session open, futures were a little higher – at 8:15 AM, S&P 500 futures were up by +16.75, Dow by +36, and NASDAQ by +94.25

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo, Sydney, and Mumbai closed lower; Hong Kong, Seoul, and Singapore closed higher
  • European markets are mostly higher – Germany and Switzerland are lower;
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • 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 3.825, down -21.6 basis points two weeks ago;
    • The 30-year is at 3.884%, down -11.9 basis points
    • The 2-year yield is at 4.866%, down -8.9 basis points;
    • The 10-Year-&-2-Year spread is at -1.041, down from -0.914
    • The 30-Year-&-10-Year spread is at 0.059, up from -0.038
  • VIX
    • At 13.85 @ 8:00 AM; down from the last close; above 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 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 red candle with small upper and lower shadows that has formed a three-day Evening Star pattern at a resistance level around the high or 4593.45, made on April 5, 2022.

    • Stochastic (9, 1, 3): %K is below the %D from above 90
    • RSI-9 has declined below 70; below 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 161.8% extension target near 4590.00 is achieved. Drifting lower since reaching 4609.75 at 12:00 PM on July 19
    • RSI-21 is near 55 after declining to below 25 on Thursday from above 80 on Wednesday
    • At/below EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving lower since 12:00 PM on Thursday, bouncing up since 3:00 PM, and forming an up-sloping flag
    • RSI-21 has moved above 55 from around 30 at 3:00 PM
    • At/above EMA20, which is at/below\ EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 12:30 AM
  • The Bollinger Band has been relatively stable with the price walking up the upper band
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Thursday, July 20, in mostly higher volume. Dow Jones Industrial Average and NYSE Composite closed higher. DJIA traded in lower volume.

Most major indices opened down and then mostly traded lower for the rest of the day.

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