Market Remarks

Morning Notes – Thursday, September 12, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Moving sideways since 4:00 PM on Wednesday within a narrow range.
  • Odds are for a sideways day. Watch for a break above 5577.50 or a break below 5634.00 for clarity.
  • The economic data due during the day:
    • PPI m/m (0.2% vs. 0.1% est.; prev. 0.0%) at 8:30 AM.
    • Core PPI m/m (0.3% vs. 0.2% est.; prev. -0.2%) at 8:30 AM.
    • Unemployment Claims (230K vs. 227K est.; prev. 228K) at 8:30 AM.
    • ECB Press Conference at 8:45 AM.
  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Up
  • 30-Min: Up-Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5528.86, 5519.86, and 5501.98.
  • Critical resistance levels for the S&P 500 are 5560.95, 5581.79, and 5599.14.
  • The key levels for E-mini futures are 5577.50, the high at 3:00 AM and 5534.00, the low at 3:30 PM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (September 2024) closed at 5556.75, and the index closed at 5554.13 – a spread of about +2.50 points; the futures closed at 5561.25; the fair value is -5.50.
  • Pre-NYSE session open, futures were mixed – at 8:45 AM, the S&P 500 futures were up by +4.25, Dow up by +46, and NASDAQ down by -0.50.

Markets Around the World

  • Markets in the East closed mostly up – Shanghai was down.
  • European markets are mostly up – Italy is higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/CHF
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are mixed.
    • Industrial metals are mostly lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.658, down -18.2 basis points from two weeks ago.
    • The 30-year is at 3.969%, down -15.8 basis points.
    • The 2-year yield is at 3.648%, down -22.5 basis points.
    • The 10-Year-&-2-Year spread is at 0.010, up from -0.033.
    • The 30-Year-&-10-Year spread is at 0.311, up from 0.287.
  • VIX
    • At 17.64 @ 8:45 AM; down from the last close; below the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.46 on August 19; Sentiment: Risk-Neutral-On

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

Weekly:
  • The week ending on September 6 was a large red candle with almost no upper and lower shadows. Closed down -4.6% below the all-time high of 5669.67.
    • Stochastic (9,1, 3): %K crossed below %D.
    • RSI-9 is just below 50.
  • The week was down -239.98 or 4.2%; the 5-week ATR is 181.19.
  • Second up week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5478.31, R1=5554.00, R2=5699.58; S1=5332.73, S2=5257.04; S1/S2/S3 pivot levels were breached
  • Below 10-week EMA, but above 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A relatively large green candle with almost no upper shadow and a long lower shadow.
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 has moved above 5o and above the 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • At a resistance level, which is lower bound of a trading broken to the downside on September 3.
    • RSI-21 has risen above 70.
    • Above EMA20, which is above the EMA10 of EMA50.
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving sideways to up since 4:00 PM on September 11.
    • RSI-21 has been moving above 60.
    • At/above EMA20, which is above EMA10 of EMA50.
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways since 1:15 AM.
  • The Bollinger Band is stable and narrow.
  • Bias: Side

Previous Session

Most major U.S. indices closed mostly higher on Wednesday, September 11 in mostly higher volume. Dow Jones Transportation Average closed down and Dow Jones Industrial Average traded in lower volume. The indices opened lower and then declined until the mid-day when they turned around and moved higher carving out one-day reversal candlestick formations. The S&P sectors closed mixed.

The dollar index closed up at 101.66, the energy futures, industrials metals, and most soft commodities closed up, and the precious metals closed mixed. The US Treasury yields closed mixed.

From Briefing.com

] Today’s trade started on a downbeat note after this morning’s release of the August Consumer Price Index (CPI). The report stoked selling interest due to the understanding that core-CPI, which excludes food and energy, remained above the Fed’s 2.0% target at 3.2% year-over-year. 

The S&P 500 was down as much as 1.6%, the Nasdaq Composite was down as much as 1.4%, the Russell 2000 was down as much as 1.9%, and the Dow Jones Industrial Average was down as much as 1.8%.

Stocks staged a turnaround, though, that left the major indices near session highs. The S&P 500 logged a 1.1% gain and the Nasdaq Composite rose 2.2%, propelled by strength in the semiconductor space and mega cap stocks. The Dow Jones Industrial Average and Russell 2000 logged slimmer gains.

[…]

Treasuries exhibited choppy action following the CPI report. The 2-yr note yield went from 3.55% to 3.69% and settled four basis points higher on the day at 3.65%. The 10-yr note yield went from 3.61% to 3.69% and settled one basis point higher on the day at 3.65%.

[…]
  • S&P 500: +16.4% YTD
  • Nasdaq Composite: +15.7% YTD
  • Dow Jones Industrial Average: +8.4% YTD
  • S&P Midcap 400: +6.4% YTD

Reviewing today’s economic data:

  • Weekly MBA Mortgage Applications Index 1.4%; Prior 1.6%
  • August CPI 0.2% (Briefing.com consensus 0.2%); Prior 0.2%, August Core CPI 0.3% (Briefing.com consensus 0.2%); Prior 0.2%
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