Market Remarks

Morning Notes – Monday, September 30, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM. Moving down since 0:15 Am on Friday in steps. Down more than 40 points,
  • Odds are for a down day with a good chance of a sideways to an up move from the pre-market levels around 5780.00. Watch for a break above 5796.75 for a change of sentiments.
  • The notable economic data due during the day:
    • Chicago PMI (46.1 est.; prev. 46.1) at 9:45 AM.
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Down
  • 15-Min: Down
  • 6-Min: Down-Side

Key Levels:

  • Critical support levels for the S&P 500 are 5727.34, 5721.01, and 5712.06.
  • Critical resistance levels for the S&P 500 are 5748.13, 5763.78, and 5767.37.
  • The key levels for E-mini futures are 5796.75, the high at 3:45 AM and 5774.25, the low at 7:45 AM.

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2024) closed at 5791.00, and the index closed at 5738.17 – a spread of about +52.75 points; the futures closed at 5791.25; the fair value is -0.25.
  • Pre-NYSE session open, futures were lower – at 9:00AM, the S&P 500 futures were down by -14.00, Dow by -91, and NASDAQ by -55.50.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Sydney, and Singapore closed up. Tokyo, Mumbai, and Seoul closed down.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • Dollar index
  • USD/CHF
  • USD/JPY
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are mostly higher.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.754, up +9.7 basis points from two weeks ago.
    • The 30-year is at 4.106%, up +12.3 basis points.
    • The 2-year yield is at 3.567%, down -2.8 basis points.
    • The 10-Year-&-2-Year spread is at 0.187, up from 0.062.
    • The 30-Year-&-10-Year spread is at 0.352, up from 0.326.
  • VIX
    • At 17.21 @ 9:00 AM; down from the last close; above the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.46 on August 19; Sentiment: Risk-Off

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

Weekly:
  • The week ending on September 27 was a small green Spinning Top at all-time highs.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is at 65.
  • The week was down 35.62 or 0.6%; the 5-week ATR is 152.64.
  • Fourth up week in the last five weeks and sixth in the previous ten weeks
  • The weekly pivot point=5734.84, R1=5770.70, R2=5803.22; S1=5702.32, S2=5666.46; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small red Spinning Top candle at just below all-time highs and after breaking above a cup-with-handle pattern. 
  • On September 19, the cash index broke above a resistance level, the high of August 30. The 61.8% extension target is around 5800.00, the 100% extension target is around 5900.00, and the 161.8% extension target is around 6053.00.
    • Stochastic (9, 1, 3): %K is below the %D and forming a potential Bearish Divergence.
    • RSI-9 is just below 70, but above the 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA.
  • Uptrend
2-Hour (E-mini futures)
  • Forming a rounding top pattern at all-time highs. Trending up since September 11. Broke above the upper bound of a horizontal channel. The December futures achieved the 61.8% extension target around 5797.00 and are nearing the 100% extension target of around 5838.00. The 161.8% extension target is around 5905.00.
    • RSI-21 has declined to below 40 from near 80.
    • Below EMA20, which is at/below the EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Breaking below a descending triangle. The 61.8% extension target is around 5746.00, the 100% extension target is around 5726.00, and the 161.8% extension target is around 5694.00.
    • RSI-21 has below 40.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 1:15 PM on Friday.
  • The Bollinger Band has been expanding a bit since 7:00 AM with the price at the lower band.
  • Bias: Down

Previous Session

Most major U.S. indices closed mixed on Friday, September 27 in lower volume. S&P 500, NASDAQ Composite, NYSE Composite, and FT Wilshire 5000 Index closed lower. The major indices opened up and trade sideways to down for the rest of the day. All but three S&P sectors – Energy, Materials, and Healthcare – closed higher. The dollar index closed lower at 100.11. The energy futures closed up but the metals – precious and industrial – futures closed down. Most of the soft commodities closed lower. The US treasury yields were down, and so were the up.

For the week, most S&P sectors closed up. The small caps were down. Most Asian and European markets also closed up. Doll was down, most commodities were up, and the US Treasury yields inched up.

From Briefing.com

[…]

The materials (-0.2%), consumer discretionary (-0.1%), health care (-0.04%), and consumer staples (-0.01%) posted negligible losses. The standout winners today were the energy (+2.1%) and utilities (+1.0%) sectors. The former was helped by rising energy prices, whereas the latter drafted off Treasury yields that moved lower in response to the PCE data and some geopolitical angst.

The 2-yr note yield fell six basis points to 3.56% and the 10-yr note yield declined four basis points to 3.75%. Pressured by the stronger yen, the U.S. Dollar Index slipped 0.1% to 100.43.

[…]

  • Nasdaq Composite: +1.0% for the week / +20.7% YTD
  • S&P 500: +0.6% for the week / +20.3% YTD
  • Dow Jones Industrial Average: +0.6% for the week / +12.2% YTD
  • S&P Midcap 400: +0.5% for the week / +12.1% YTD
  • Russell 2000: -0.1% for the week / +9.7% YTD

Reviewing today’s economic data:

  • August Adv. Intl. Trade in Goods balance (actual -$94.3 bln; prior -$102.8 bln), Adv. Retail Inventories (actual 0.5%; prior 0.8%), and Adv. Wholesale Inventories (actual 0.2%; prior 0.3%).
  • Personal income increased 0.2% month-over-month in August (Briefing.com consensus 0.4%) following a 0.3% increase in July. Personal spending increased 0.2% (Briefing.com consensus 0.3%) following a 0.5% increase in July. The PCE Price Index rose 0.1% month-over-month (Briefing.com consensus 0.1%) following a 0.2% increase in July. The core-PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus 0.2%) following a 0.2% increase in July. On a year-over-year basis, the PCE Price Index was up 2.2%, versus 2.5% in July, while the core-PCE Price index was up 2.7%, versus 2.6% in July.
  • The final reading for the September University of Michigan Index of Consumer Sentiment reached 70.1 (Briefing.com consensus 69.0) versus the preliminary reading of 69.0. The final reading for August was 67.9. In the same period a year ago, the index stood at 67.8.
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