Morning Notes – Wednesday, January 17, 2024

/ January 17, 2024

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM – moving down since 7:15 AM – down more than 15 points; at a support level around 4767.500.
  • The odds are for a down day – watch for a break above 4785.25 for a change of sentiments.
  • The major economic data reports that are due during the day.
    • Retail Sales (0.6% vs. 0.4% est.; prev. 0.3%) at 8:30 AM.
    • Core Retail Sales (0.4% vs 0.2%; prev. 0.2%) at 8:30 AM.
    • Industrial Prices (0.0% vs. -0.6% est.; prev. -0.5%) at 8:30 AM.
    • Industrial Production (0.1% vs. -0.1%; prev. 0.0%) at 9:15 AM
    • Capacity Utilization (78.6% vs. 78.7% est.; prev. 78.6%) at 9:15 AM.
    • Business Inventories (-0.1% est.; prev. -0.1%) at 10:00 AM.
    • NAHB Housing Index (39 est..; prev. 37) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Side-Down
  • 30-Min: Down
  • 15-Min: Down
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 4739.58, 4730.35, and 4717.85.
  • Critical resistance levels for the S&P 500 are 4747.12, 4767.55, and 4782.34.
  • The key levels for E-mini futures are 4785.25, the high at 7:15 AM, and 4767.50, the low at 8:00 AM on January 9.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2024) closed at 4798.50, and the index closed at 4765.98 – a spread of about +32.50 points; the futures closed at 4798.50; the fair value is 0.00.
  • Pre-NYSE session open, futures were lower – at 8:45 AM, S&P 500 futures were down by -23.75, Dow by -154, and NASDAQ by -110.00

Markets Around the World

  • Markets in the East closed lower.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • EUR/USD
  • AUD/USD
  • NZD/USD
  • INR/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 4.102, up +15.6 basis points from two weeks ago.
    • The 30-year is at 4.324%, up +23.9 basis points.
    • The 2-year yield is at 4.224%, down -10.9 basis points.
    • The 10-Year-&-2-Year spread is at -0.122, up from -0.387
    • The 30-Year-&-10-Year spread is at 0.222, up from +0.139
  • VIX
    • At 14.50 @ 7:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 15.57 on November 9; low = 12.35 on January 11; Sentiment: Risk-Off

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

Weekly:
  • The week ending on January 12 was a green candle closing at the highest level since December 2021.
  • Broke above a down-sloping Flag on November 14 – the 61.8% extension target 4597.07 is achieved, the 100% extension target is around 4901.99, and the 161.8% extension target is near 5395.00.
    • Stochastic (9,1, 3): %K crossed above the %D.
    • RSI-9 has turned up to 70.
  • The week was up +86.59 or +1.8%; the 5-week ATR is 91.91.
  • Fourth up week in the last five weeks and ninth in the previous ten weeks
  • The weekly pivot point=4762.02, R1=4864.21, R2=4864.60; S1=4721.63, S2=4659.44; R1/R2 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small red candle that looks like a Doji and contained entirely within the lower shadow of previous day’s candle, indicating strong bearish sentiments.
    • Stochastic (9, 1, 3): %K is below %.
    • RSI-9 has declined below 70; above 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend
2-Hour (E-mini futures)
  • Drifting lower since 4:00 AM on January 11 from near the upper bound of a Horizontal Trading Channel to its middle.
    • RSI-21 has been moving below 50 since Monday.
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Trending lower since 9:30 AM on January 12. Declined from 4836.50 to a support level – the low of January 11 – at 4772.75.
    • RSI-21 has been moving around 40.
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving lower since 7:00 AM on January 15.
  • The Bollinger Band has been expanding since 7:30 AM with the price walking down the lower bound.
  • Bias: Down

Previous Session

Major U.S. indices closed lower on Tuesday, January 16 in mostly higher volume. Russell 2000 traded in lower volume. The Major indices opened lower and then traded lower rest of the day with occasional bounces.

Only one S&P sector – Technology – closed higher. The dollar index closed up. Energy, precious metals, and industrial metal futures closed lower. Most soft commodities closed higher. The US Treasury Yields moved up.

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