Morning Notes – Friday, February 9, 2024

/ February 9, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 8:15 AM – moving sideways to up since 10:30 AM on Wednesday.
  • The odds are for a sideways to an up day – watch for a break above 5027.25 or a break below 5002.50 for clarity.
  • No major economic data report is due during the day:
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 4982.87, 4969.05, and 4957.77.
  • Critical resistance levels for the S&P 500 are 5003.18, 5008.44, and 5016.49.
  • The key levels for E-mini futures are 5027.25, the high at 7:45 AM, and 5002.50, the low at 12:30 PM on Wednesday.

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (March 2024) closed at 5017.00, and the index closed at 4997.91 – a spread of about +19.00 points; the futures closed at 5017.75; the fair value is -0.75.
  • Pre-NYSE session open, futures were higher – at 8:00 AM, the S&P 500 futures were up by +7.50, Dow by +27, and NASDAQ by +49.75.

Markets Around the World

  • Markets in the East closed mostly higher – Hong Kong and Singapore closed down. Shanghai and Seoul were closed.
  • European markets are mostly higher – Switzerland is down.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • Precious metals are mixed.
    • Industrial metals are lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.170, up +7.8 basis points from two weeks ago.
    • The 30-year is at 4.376%, down -0.4 basis points.
    • The 2-year yield is at 4.450%, up +14.7 basis points.
    • The 10-Year-&-2-Year spread is at -0.280, down from -0.171
    • The 30-Year-&-10-Year spread is at 0.206, down from +0.248
  • VIX
    • At 12.86 @ 8:30 AM; up from the last close; below the 5-day SMA
    • Recent high = 15.40 on December 17; low = 12.41 on January 24; Sentiment: Risk-Neutral-On

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

Weekly:
  • The week ending on February 2 was a green candle with small upper and lower shadows closing at the all-time high.
  • Broke above a down-sloping Flag on November 14 – the 100% extension target around 4901.00 is achieved, and the 161.8% extension target is near 5395.00.
    • Stochastic (9,1, 3): %K is below the %D above 90.
    • RSI-9 is around 75.
  • The week was up +67.64 or +1.4%; the 5-week ATR is 103.43.
  • Fourth up week in the last five weeks and ninth in the previous ten weeks
  • The weekly pivot point=4929.35, R1=5007.55, R2=5056.49; S1=4877.41, S2=4796.21; R1/R2/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small candle with small shadows and small body at all-time highs.
  • Broke above a Horizontal Channel between 4802.40 and 4682.11 on January 19 – the161.8% extension target is near 4997.00 is achieved; the 261.8% extension target is around 5117.00.
    • Stochastic (9, 1, 3): %K is above %D.
    • RSI-9 is above 70 after making a Bearish Divergence; above 8-day EMA.
  • Above 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 4:00 PM on January 31 in an up-down pattern. Drifting sideways to up since 12:00 PM on Wednesday.
  • Broke above a Horizontal Trading Channel between 4841.25 and 4702.00 on January 19 – the 100% extension target near 4981.00 is achieved and the 161.8% extension target is near 5067.00.
    • RSI-21 has bounced up to above 75 from declined to below 60. Potential Bearish Divergence.
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Drifting sideways to up since 1:30 PM on Wednesday.
    • RSI-21 has moved above 65 from below 50. Potential Bearish Divergence.
    • 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 3:00 PM on Wednesday.
  • The Bollinger Band has been expanding a bit since 2:45 AM with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Thursday, February 8 in mixed volume. S&P 500 and NASDAQ Composite traded in lower volume. The major indices opened flat and then traded sideways for the rest of the day. S&P 500, Dow Jones Industrial Average, NASDAQ Composite, NYSE Composite, and Wilshire 5000 Total Market Index closed at all-time highs. All except DJIA made all-time intraday highs.

All but four S&P sectors – Consumer Staples, Materials, Utilities, and Healthcare – closed higher. The dollar index closed up, and the energy futures, the precious metals, and the soft commodities closed mixed. The industrial metals closed mostly lower. Bonds fell and the US Treasury Yields closed up.

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