Morning Notes – Wednesday, March 6, 2024

/ March 6, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM – moving up since 2:30 AM – up more than 25 points.
  • The odds are for an up day – watch for a break below 5100.00 for a change of sentiments.
  • The major economic data report due during the day:
    • ADP Non-Farm Employment Change 14K vs. 149K est.; prev. 111K) at 8:15 AM.
    • Fed Chair Powell’s Semi-Annual Testimony to Congress at 10:00 AM.
    • JOLTS Job Openings (8.80M Est.; prev. 9.03M) at 10:00 AM.
    • Final Wholesale Inventories (-0.1% est.; prev. -0.1%) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Side-Up

Key Levels:

  • Critical support levels for the S&P 500 are 5080.96, 5056,82, and 5038.83.
  • Critical resistance levels for the S&P 500 are 5114.54, 5129.62, and 5142.35.
  • The key levels for E-mini futures are 5121.50, the high at 10:00 AM on Tuesday, and 5100.00, the low at 6:45 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2024) closed at 5085.75, and the index closed at 5078.65 – a spread of about +7.00 points; the futures closed at 5085.75; the fair value is 0.00.
  • Pre-NYSE session open, futures were higher – at 8:30 AM, the S&P 500 futures were up by +26.00, Dow by +133, and NASDAQ by +141.25.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Tokyo, and Seoul closed down. Hong Kong, Sydney, Mumbai, and Singapore closed up.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Dollar index
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.131, down -14.4 basis points from two weeks ago.
    • The 30-year is at 4.278%, down -17.1 basis points.
    • The 2-year yield is at 4.544%, down -7.5 basis points.
    • The 10-Year-&-2-Year spread is at -0.413, down from -0.344.
    • The 30-Year-&-10-Year spread is at 0.147, down from +0.174.
  • VIX
    • At 14.07 @ 7:45 AM; down from the last close; above the 5-day SMA
    • Recent high = 16.12 on February 21; low = 13.08 on March 1; Sentiment: Risk-On

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

Weekly:
  • The week ending on March 1 was a small green candle with a small lower shadow and almost no upper shadow 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 above the %D near 100.
    • RSI-9 is above 80.
  • The week was up +48.28 or +0.9%; the 5-week ATR is 123.66.
  • Fourth up week in the last five weeks and eight in the previous ten weeks
  • The weekly pivot point=5111.57, R1=5165.84, R2=5194.61; S1=5082.80, S2=5028.53; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A red candle that gapped with almost no upper shadow and a small shadow.
  • Broke above a Horizontal Channel between 4802.40 and 4682.11 on January 19 – the 261.8% extension target around 5117.00 is achieved.
    • Stochastic (9, 1, 3): %K is below %D, below 40.
    • RSI-9 is around 55 after making a few Bearish Divergences since December 19; below 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 mostly sideways since February 22; moving within an upsloping Linear Regression channel of one StdDev over the past twenty days.
    • RSI-21 has bounced up to above 50 after declining to below 20 on Tuesday.
    • Below EMA10 of EMA50, which is below EMA 20.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Bouncing up since sideways to up since 3:00 PM from a low of 5063.00.
    • RSI-21 has moved above 50 from around 20.
    • Above EMA10 of EMA50, which is above EMA20.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 2:45 AM.
  • The Bollinger Band has been expanding since 2:45 AM with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed sharply lower on Tuesday, March 5 in mostly higher volume. Dow Jones Transportation Average traded in lower volume. Major indices gapped down at the open and then traded lower for most of the day before recovering a bit near the end. Major indices, except Transports and Russell 2000, are near 0.5-to-3.0% of their all-time highs.

All but three S&P sectors – Consumer Staples, Energy, and Financials – closed lower. The dollar index closed down, the energy futures and the precious metals closed mixed. The soft commodities closed mostly lower. Bonds rose and the US Treasury Yields closed down.

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