Morning Notes – Thursday, March 7, 2024

/ March 7, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM – moving up since 3:00 AM – up more than 45 points.
  • The odds are for an up day – watch for a break below 5109.00 for a change of sentiments.
  • The major economic data report due during the day:
    • ECB Monetary Policy Statement at 8:15 AM.
    • ECB Main Refinancing Rate (4.5% vs. 4.5% est.; prev. 4.5%) at 8:15 AM
    • Unemployment Claims (217K vs. 217K est.; prev. 215K) at 8:30 AM.
    • Revised Nonfarm Productivity (3.2% vs. 3.1% est.; prev. 3.2%) at 8:30 AM.
    • Revised Unit Labor Costs (0.4% vs. 0.7% est.; prev. 0.5%) at 8:30 AM.
    • Trade Balance (-67.4B vs. -63.4B est.; prev. 62.2) at 8:30 AM
    • ECB Press Conference at 8:45 AM.
    • Fed Chair Powell’s Semi-Annual Testimony to Senate at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for the S&P 500 are 5093.13, 5080.96, and 5056,82.
  • Critical resistance levels for the S&P 500 are 5129.62, 5144.38, and 5149.67.
  • The key levels for E-mini futures are 5134.50, the high at 12:30 PM on Wednesday, and 5109.00, the low at 4:30 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (March 2024) closed at 5112.00, and the index closed at 5104.76 – a spread of about +8.00 points; the futures closed at 5111.75; the fair value is +0.25.
  • Pre-NYSE session open, futures were higher – at 8:15 AM, the S&P 500 futures were up by +18.25, Dow by +66, and NASDAQ by +95.00.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and Singapore closed down. Sydney, Mumbai, and Seoul closed up.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • USD/CAD
  • Dollar index
  • USD/JPY
  • NZD/USD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.104, down -22.1 basis points from two weeks ago.
    • The 30-year is at 4.240%, down -25.2 basis points.
    • The 2-year yield is at 4.560%, down -11.0 basis points.
    • The 10-Year-&-2-Year spread is at -0.456, down from -0.345.
    • The 30-Year-&-10-Year spread is at 0.136, down from +0.167.
  • VIX
    • At 14.41 @ 8:00 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 relatively small Doji candle near the previous day’s high.
  • 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 turning up below %D.
    • RSI-9 is above 60 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 sideways since February 22 – near the top of the range; moving within an upsloping Linear Regression channel of one StdDev over the past twenty days – price is at the middle of the channel.
    • 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)
  • Breaking above a symmetrical triangle – a convincing break above will have a 61.8% extension target around 5169.56 and the 100% extension target around 5205.75.
    • RSI-21 has moved above 60.
    • 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 up since 4:00 AM.
  • The Bollinger Band has been expanding since 4:00 AM with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Wednesday, March 6 in mostly lower volume. Russell 2000 traded in higher volume. Major indices opened higher and then traded higher for most of the day before giving up a lot of gains near the end and closed with 02%-to-0.7% higher.

All but one S&P sector – Consumer Discretionary – closed higher. The dollar index closed down, the energy futures closed mixed, the precious metals closed higher, and the soft commodities closed mostly higher. Bonds rose and the US Treasury Yields closed down.

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