Morning Notes – Wednesday, September 20, 2023

/ September 20, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 8:45 AM, moving up since 1:00 AM – up more than 18 points, awaiting the FOMC’s rate decision tomorrow
  • The odds are for an up day – watch for a break below 4488.75 for a change of sentiments
  • The major economic data reports due during the day:
    • Federal Funds Rate ( 5.50% est.; prev. 5.50%) at 2:00 PM
    • FOMC Statement at 2:00 PM
    • FOMC Economic Projections at 2:00 PM
    • FOMC Press Conference at 2:30 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for the S&P 500 are 4448.35, 4416.61, and 4401.67
  • Critical resistance levels for the S&P 500 are 4466.36, 4486.35, and 4497.98
  • The key levels for E-mini futures are 4509.50, the high at 6:30 AM on Tuesday and a break below 4488.75, the low at 3:15 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2023) closed at 4491.00, and the index closed at 4443.95 – a spread of about +47.00 points; the futures closed at 4490.00; the fair value is +1.00
  • Pre-NYSE session open, futures were higher – at 8:15 AM, S&P 500 futures were up by +12.25, Dow by +109, and NASDAQ by +39.25

Markets Around The World

  • Markets in the East closed mostly lower – Seoul and Singapore closed up
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are mixed
    • Industrial metals are mostly higher
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.365, up +9.7 basis points from two weeks ago;
    • The 30-year is at 4.428%, up +5.2 basis points
    • The 2-year yield is at 5.105%, up +14.7 basis points;
    • The 10-Year-&-2-Year spread is at -0.740, down from -0.690
    • The 30-Year-&-10-Year spread is at 0.063, down from +0.108
  • VIX
    • At 14.07 @ 7:45 AM; down from the last close; above the 5-day SMA;
    • Recent high = 18.88 on August 18; low = 12.68 on September 15
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on September 15 was a red candle with almost no lower shadow and a small upper shadow closing a little below the previous week’s red candle but still within the real body of the large green candle of the week ending of September 1
    • Stochastic (9,1, 3): %K is below the %D;
    • RSI-9 is around 55
  • The week was down -7.17 or -0.2%; the 5-week ATR  is 108.53
  • Third down week in the last five weeks and fifth in the previous ten weeks;
  • The weekly pivot point=4469.84, R1=4492.47, R2=4534.62; S1=4427.69, S2=4405.06; R1 pivot level was breached
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A small Dragonfly Doji-like candle near the close of the previous day’s Doji-like candle – a close above 4466.00 will be a short-term bullish signal.

    • Stochastic (9, 1, 3): %K is at/below the %D
    • RSI-9 is around 45; below 8-DMA
  • Below 20-day EMA; at/above 50-day EMA; above 100-day SMA, and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Declining since 2:00 AM on September 15 after breaching a resistance level briefly, moving sidewyas to down within a trading range between 4560.00 and 4430.00
    • RSI-21 has risen to 50 from below 25
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Moving sideways to up since 2:30 PM on September 19
    • RSI-21 has risen to above 60 from 20 on Friday
    • Above EMA20, which is above  EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 2:00 AM
  • The Bollinger Band has been expanding since 2:45 AM, with the price walking up the upper band
  • Bias: Up

Previous Session

Major U.S. indices closed lower on Tuesday, September 19, in mostly higher volume. Dow Jones Transportation Average traded in higher volume.

The major indices opened lower, traded down, made the day’s low by mid-day,  and then rebounded, recovering a major portion of the loss by the close. Most made Dragonfly Doji or similar reversal candlesticks.

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