Morning Notes – Tuesday, September 26, 2023

/ September 26, 2023

Directional Bias For The Day:

  • S&P Futures are lower at 8:45 AM, moving sideways within a trading range between  4366.50 and 4344.00
  • The odds are for a sidewyas to a down day – watch for a break above 4383.50 or a break below 4338.25 for clarity
  • The major economic data reports due during the day:
    • SP/CS Composite-20 HPI ( 0.0% est.; prev. -1.2%) at 9:00 AM
    • HPI ( 0.4% est.; prev. 0.3%) at 9:00 AM
    • CB Consumer Confidence ( 105.5 est.; prev., 106.1 ) at 10:00 AM
    • New Home Sales ( 699K est.; prev. 714K) at 10:00 AM
    • Richmond Manufacturing Index ( -6 est.; prev. -7) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for the S&P 500 are 4347.70, 4357.40, and 4375.70
  • Critical resistance levels for the S&P 500 are 4316.38, 4302.70, and 4291.70
  • The key levels for E-mini futures are 4383.50, the high at 4:45 PM on Monday below 4338.25, the low at 9:00 AM on Monday

Pre-Open

  • On Monday at 4:00 PM, S&P futures (December 2023) closed at 4379.50, and the index closed at 4337.44 – a spread of about +42.00 points; the futures closed at 4378.75; the fair value is +0.75
  • Pre-NYSE session open, futures were lower – at 8:15 AM, S&P 500 futures were down by -12.75, Dow by -105, and NASDAQ by -51.75

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • NZD/USD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/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 4.493, up +20.5 basis points from two weeks ago;
    • The 30-year is at 4.614%, up +23.7 basis points
    • The 2-year yield is at 5.148%, up +15.3 basis points;
    • The 10-Year-&-2-Year spread is at -0.655, down from -0.707
    • The 30-Year-&-10-Year spread is at 0.121, down from +0.089
  • VIX
    • At 17.35 @ 7:30 AM; up from the last close; above the 5-day SMA;
    • Recent high = 18.88 on August 18; low = 13.86 on September 18
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on September 22 was a relatively large red candle with almost no lower and upper shadows at a support level near 4335.00, the low of the week ending on August 18, 2023
    • Stochastic (9,1, 3): %K is below the %D;
    • RSI-9 has declined to below 45
  • The week was down -130.26 or -2.9%; the 5-week ATR  is 107.50
  • Third down week in the last five weeks and sixth in the previous ten weeks;
  • The weekly pivot point=4367.64, R1=4418.78, R2=4517.51; S1=4268.91, S2=4217.77; S1/S2/S3 pivot levels were breached
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A green candle with almost no upper shadow and a small lower shadow at a support level. Gapped down on September 21 and broke below a symmetrical triangle – the 61.8% extension target is around 4250.00, and the 100% extension target is around 4150.00.

    • Stochastic (9, 1, 3): %K has crossed above the %D from near zero
    • RSI-9 has turned up to around 30; below 8-DMA
  • Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • The downtrend since 2:00 AM on September 15. Broke below a horizontal channel on September 21 – the 61.8% extension target near 4355.00 is achieved, and the 100% extension target is around 4305.00, moving sideways to down since 6:00 PM on Friday
    • RSI-21 has bounced up above 40 from 10; bullish divergence at 6:00 AM on Monday
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Moving sideways to down since 4:30 PM on Friday – moving between 4400.00 and 4338.00
    • RSI-21 has been moving between 40 and 50 since Friday
    • At/above EMA20, which is below  EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways  to up since 2:45 AM
  • The Bollinger Band has been stabilizing, with the price bouncing up to the upper band from the middle band
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Monday, September 25, in lower volume.

The major indices opened flat and then traded sideways to up. All but three S&P sectors – Consumer Staples, Utilities, and Healthcare – closed higher.

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