Morning Notes – Wednesday, August 16, 2023

Directional Bias For The Day:

• S&P Futures are a little higher at 8:00 AM; moving sideways to up within an up-sloping flag since 3:30 PM
• The odds are for a sidewyas to an up day with elevated volatility – watch for a break above 4467.25 or a break below 4448.00 for more clarity
• The major economic data report due during the day:
  • Building Permits ( 1.47M est.; prev. 1.44M) at 8:30 AM
  • Housing Starts ( 1.45M est.; prev. 1.43M ) at 8:30 AM
  • Industrial Production ( 0.3% est.; -0.5%) at 9:15 AM
  • Capacity Utilization Rate ( 79.1% est.; prev. 78.9%) at 9:15 AM
  • FOMC Meeting Minutes at 2:00 PM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4432.19, 4416.79, and 4408.46
• Critical resistance levels for S&P 500 are 4454.55, 4460.27, and 4478.87
• The key levels for E-mini futures are 4467.25, the high at 4:30 AM, and 4448.00, the low at 7:00 AM

Pre-Open

• On Tuesday at 4:00 PM, S&P futures (September 2023) closed at 4454.00, and the index closed at 4437.86 – a spread of about +16.25 points; the futures closed at 4454.00; the fair value is +0.0
• Pre-NYSE session open, futures were a little higher- at 7:45 AM, S&P 500 futures were up by +2:00, Dow by +23, and NASDAQ by +5.50

Markets Around The World

• Markets in the East closed mostly mixed – Mumbai closed higher
• European markets are mostly higher – the UK and Italy are lower
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are lower
  • Industrial metals are mostly lower
  • Soft commodities are mostly lower
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.221, up +17.0 basis points from two weeks ago;
  • The 30-year is at 4.319%, up +21.4 basis points
  • The 2-year yield is at 4.954%, up +4.2 basis points;
  • The 10-Year-&-2-Year spread is at -0.733, up from -0.861
  • The 30-Year-&-10-Year spread is at 0.098, up from +0.054
• VIX
  • At 16.40 @ 7:15 AM; up from the last close; below the 5-day SMA;
  • Recent high = 18.14 on August 8; low = 12.73 on June 22
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed lower on Tuesday, August 15, in mostly higher volume. Dow Jones Transportation Average traded in lower volume.

The market opened lower and then traded lower for the rest of the day. All S&P sectors closed lower.