Morning Notes – Monday, October 9, 2023

/ October 9, 2023

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM – moving within a trading range between 4322.50 and 4299.50 after gapping down more than 40 points at the week’s open
  • The odds are for a sideways to down day with elevated volatility – watch for a break above 4322.50 or a break below 4299.50 for clarity
  • The major economic data reports due during the day:
    • Geopolitical news regarding the Middle East war
  • Weekly: Uptrend Under Pressure
  • Daily: Correction
  • 120-Min: Down-Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 4290.35, 4268.5, and 4242.56
  • Critical resistance levels for the S&P 500 are 4307.52, 4322.32, and 4333.15
  • The key levels for E-mini futures are 4322.50, the high at 5:00 AM, and 4299.50, the low at 3:15 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2023) closed at 4342.00, and the index closed at 4308.50 – a spread of about +33.50 points; the futures closed at 4341.50; the fair value is +0.50
  • Pre-NYSE session open, futures were lower – at 9:00 AM, S&P 500 futures were down by -24.75, Dow by -170, and NASDAQ by -101.50

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo was down; Shanghai was closed
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • NZD/USD
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.717, up +23.7 basis points from two weeks ago;
    • The 30-year is at 4.886%, up +33.4 basis points
    • The 2-year yield is at 5.013%, down -13.5 basis points;
    • The 10-Year-&-2-Year spread is at -0.296, up from -0.668
    • The 30-Year-&-10-Year spread is at 0.169, up from +0.072
  • VIX
    • At 19.19 @ 8:45 AM; up from the last close; above the 5-day SMA;
    • Recent high = 20.88 on October 4; low = 15.83 on September 129
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on October 6 was a relatively small green candle with a small upper shadow and a lower shadow more than twice the size of the real body. The index is just below a resistance, which was acting as a support before September 22.
    • Stochastic (9,1, 3): %K crossed above the %D;
    • RSI-9 has turned up above 40
  • The week was up +20.45 or +0.6%; the 5-week ATR  is 101.50
  • First up week in the last five weeks and third in the previous ten weeks;
  • The weekly pivot point=4283.02, R1=4349.58, R2=4390.67; S1=4241.93, S2=4175.37; S1 pivot level was breached
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A large green candle with small upper and lower shadows. A one-day reversal pattern at a support level – a junction of the uptrend line since October 13, 2022, and the lows of June 1, 2023.
  • Gapped down on September 21 and broke below a symmetrical triangle – the 61.8% extension target near 4250.00 is achieved; the 100% extension target is around 4150.00.

    • Stochastic (9, 1, 3): %K is above the %D
    • RSI-9 bounced up to above 45 from around 20, above 8-DMA;
  • Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Bounced up from support around 4245.00 to a resistance level within the downtrend since 2:00 AM on September 15. Broke below a horizontal channel on September 21 – the 100% extension target near 4305.00 is achieved, and the 161.8% extension target is around 4224.66;
  • Turned down at 8:00 AM on September 29 from a resistance level after bouncing from 4277.00, the low reached at 6:00 AM on September 27
  • The chart action since early June shows an uneven Head-and-Shoulder pattern. The neckline was broken on September 25. The 61.8% extension target is around 4210.00, the 100% extension target is near 4110.00, and the 161.8% extension target is around 3950.00. A convincing move above 4400.00 will nullify the pattern
    • RSI-21 has been moving around 55 for over two day
    • At/above EMA20, which is at/below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Moving sidewyas since 6:00 PM on Sunday after gapping down more than 40 points at the week’s open; moving within 4322.50 and 4299.50
    • RSI-21 has been moving around 50
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sidewyas to up since 11:00 PM on Sunday.
  • The Bollinger Band has been contracting a little since 8:15 AM
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Friday, October 6, in mostly higher volume. Dow Jones Transportation Average traded in lower volume. The indices gapped down at the open and immediately turned up and then traded higher for the rest of the day. Most indices made a one-day reversal candle in higher volume. All but one S&P sector – Consumer Staples – closed higher.

For the week, the major US indices closed mixed in most higher volume. S&P 500, NASDAQ Composite, and the Wilshire 5000 Total Market index closed up. The markets in Asia and Europe mostly closed down. The dollar index was down, the energy futures were mixed, the metals were down, and the soft commodities were mixed. The US Treasury Yields closed up. All but three S&P sectors – Technology, Healthcare, and Communication Services – closed down.

Print Friendly, PDF & Email

Related posts