Morning Notes – Thursday, July 27, 2023

/ July 27, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 9:15 AM. Futures have been moving up since 3:00 PM on Wednesday – up more than 50 points.
  • The odds are for an up day – watch for a break below 4619.25
  • The major economic data reports due during the day:
    • ECB Main Refinancing Rate (4.25% vs. 4.25% est.; prev. 4.00%) at 8:15 AM
    • ECB Monetary Policy Statement at 8:15 AM
    • Advance GDP ( 2.4% vs. 1.8% est.; prev. 2.0% ) at 8:30 AM
    • Unemployment Claims ( 221K vs. 234K est.; prev. 228K) at 8:30 AM
    • Durable Goods Orders ( 4.7% vs. 1.3% est.; prev. 1.8% ) at 8:30 AM
    • Core Durable Goods Orders (0.6% vs. 0.1% est.; prev. 0.7%) at 8:30 AM
    • Goods Trade Balance (-87.8B vs. -91.8B est.; prev. -91.9B) at 8:30 AM
    • Prelim Wholesale Inventories ( -0.3% vs. -0.1% est.; prev. 0.0%) at 8:30 AM
    • ECB Press Conference at 8:45 AM
    • Pending Home Sales ( -0.5% est.; prev. -2.7%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4593.45, 4582.47, and 4568.08
  • Critical resistance levels for S&P 500 are 4603.07, 4617.01, and 4637.30
  • The key levels for E-mini futures are 4634.50, the high at 8:45 AM, and 4619.25, the low at 7:00 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2023) closed at 4596.25, and the index closed at 4566.75 – a spread of about +29.75 points; the futures closed at 4595.25; the fair value is +1.00
  • Pre-NYSE session open, futures were up – at 9:00 AM, S&P 500 futures were up by +35.75, Dow by +71, and NASDAQ by +213.50

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 12.89 @ 8:45 AM; down from the last close; 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 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 small Doji within a resistance zone

    • Stochastic (9, 1, 3): %K is at/below %D;
    • RSI-9 is just above 70; at/below 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Broke above a Horizontal Channel overnight – the 61.8% extension target is near 4640.00, the 100% extension target is near 4660.00, and the 161.8% extension target is near 4690.00
    • RSI-21 has advanced to above 80 from below 40
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving up since 3:00 PM on Wednesday after the FOMC press conference. Breaking above high resistance created on March 29, 2022
    • RSI-21 is just above 70
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 4:00 PM.
  • The Bollinger Band is expanded with the price walking up the upper band.
  • Bias: Up

Previous Session

Major U.S. indices closed mixed on Wednesday, July 26, in mostly higher volume. S&P 500 and NASDAQ Composite closed lower. Dow Jones Transportation Average traded in lower volume.

 

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