Morning Notes – Wednesday, July 26, 2023

/ July 26, 2023

Directional Bias For The Day:

  • S&P Futures are lower at 8:45 AM. Futures have been moving down since 3:30 AM – down more than 14 points.
  • The odds are for a down day – watch for a break above 4601.50 for a change of sentiments.
  • The major economic data reports due during the day:
    • New Home Sales ( 726K est.; prev. 763K) at 10:00 AM
    • FOMC Statement at 2:00 PM
    • Fed Funds Rates at 2:00 PM
    • FOMNC PRess Conference at 2:30 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4558.45, 4547.46, and 4535.79
  • Critical resistance levels for S&P 500 are 4574.23, 4580.62, and 4593.45
  • The key levels for E-mini futures are 4601.50, the high at 3:30 AM, and 4585.00, the low at 10:30 AM on Tuiesday

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2023) closed at 4595.25, and the index closed at 4567.46 – a spread of about +27.75 points; the futures closed at 4596.00; the fair value is -0.75
  • Pre-NYSE session open, futures were down – at 8:15 AM, S&P 500 futures were down by -8.25, Dow by -68, and NASDAQ by -56.50

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and  Seoul closed lower; Sydney, Mumbai, and Singapore closed higher
  • European markets are mostly lower – Spain is up
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • USD/JPY
  • AUD/USD
  • NZD/USD
  • Dollar index
  • GBP/USD
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are higher
    • Soft commodities are higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.912, down -6.8 basis points from two weeks ago;
    • The 30-year is at 3.955%, down -6.4 basis points
    • The 2-year yield is at 4.878%, up +0.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.966, down from -0.897
    • The 30-Year-&-10-Year spread is at 0.043, up from +0.039
  • VIX
    • At 14.05 @ 6:45 AM; up from the last close; above the 5-day SMA;
    • Recent high = 21.33 on May 4; low = 12.73 on June 22
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on July 21 was a green candle with almost no lower shadow and an upper shadow bigger than the real body just below a resistance level created by the high of the week of March 28, 2022.
    • Stochastic (9,1, 3): %K is crisscrossing the %D above 80;
    • RSI-9 is near75
  • The week was up +30.92 or +0.7%; the 5-week ATR  is 96.29
  • An up week, third in the last five weeks, and eight in the previous ten weeks;
  • The weekly pivot point=4539.89, R1=45741.88, R2=4613.42; S1=4501.35, S2=4466.36; R1 pivot level was breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A green candle with almost no lower shadow and an upper shadow equal to the real body.

    • Stochastic (9, 1, 3): %K is above %D;
    • RSI-9 is above 70; at/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 161.8% extension target near 4590.00 is achieved. Moving within a range bounded by 4609.75 and 4557.25 since 12:00 PM on July 18
    • RSI-21 has declined to just above 40
    • At/below EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Broke below an uptrend line from the low of 4560.00 made at 2:00 AM on July 24
    • RSI-21 is just above 40
    • Below EMA20, which is at EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 4:30 AM.
  • The Bollinger Band is expanding since 5:30 AM with the price walking down the lower band.
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly higher on Tuesday, July 25, in mostly higher volume. Dow Jones Transportation Average closed lower. NASDAQ Composite traded in lower volume. The major indices opened up and then drifted higher for the rest of the day.

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