Market Remarks

Morning Notes – Tuesday, October 1, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are lower at 8:45 AM. Moving sideways to down since 4:00 PM.
  • Odds are for a sideways to down day. Watch for a break above 5822.50 or a break below 5807.25 for clarity.
  • The notable economic data due during the day:
    • Final Manufacturing PMI (47.0 est.; prev. 47.0) at 9:45 AM.
    • ISM Manufacturing PMI (47.6 est.; prev. 47.2) at 10:00 AM.
    • JOLTS Job Openings (7.46M est.; prev. 7.67M) at 10:00 AM.
    • Construction Spending (0.2% est.; prev. -0.3%) at 10:00 AM.
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Up-Side
  • 15-Min: Up-Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5729.72, 5703.53, and 5684.37.
  • Critical resistance levels for the S&P 500 are 5763.78, 5783.90, and 5805.33.
  • The key levels for E-mini futures are 5822.50, the high at 10:00 PM and 5807.25, the low at 3:15 AM.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (December 2024) closed at 5816.00, and the index closed at 5762.48 – a spread of about +53.50 points; the futures closed at 5814.25; the fair value is +1.75.
  • Pre-NYSE session open, futures were lower – at 8:30AM, the S&P 500 futures were down by -6.00, Dow by -123, and NASDAQ by -6.75.

Markets Around the World

  • Markets in the East closed mostly down – Tokyo was up. Shanghai, Hong Kong, and Seoul were closed.
  • European markets are mostly higher – Spain is lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are mixed.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.787, up +16.4 basis points from two weeks ago.
    • The 30-year is at 4.123%, up +19.2 basis points.
    • The 2-year yield is at 3.647%, up +8.6 basis points.
    • The 10-Year-&-2-Year spread is at 0.140, up from 0.062.
    • The 30-Year-&-10-Year spread is at 0.336, up from 0.308.
  • VIX
    • At 16.85 @ 8:30 AM; up from the last close; above the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.46 on August 19; Sentiment: Risk Neutral-to-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 Bullish Engulfing candle with almost no upper shadow and a small lower shadow at all-time highs continuing the break 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 crossed above the %D and is above 90.
    • RSI-9 is above 70, and 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)
  • Moving sideways to up since 12:00 PM on September 19. 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 is around 55.
    • Above EMA20, which is above the EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving below a resistance level around 5822.50, also within a Horizontal Channel. A break above will have the 61.8% extension target around 5835.00, the 100% extension target around 5844.00, and the 161.8% extension target around 5856.00.
    • RSI-21 is just above 50.
    • 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 down since 11:30 PM on Monday.
  • The Bollinger Band is stable and flattening.
  • Bias: Up-Side

Previous Session

Most major U.S. indices closed higher Monday, September 30 in mixed volume. Dow Jones Industrial Average and Russell 2000 traded in lower volume. The major indices opened lower and then traded sideways to down before advancing after 2:30 PM.

All but three S&P sectors – Discretionary5, Staples and Energy – closed higher. The dollar index closed higher at 100.52. DJIA, S&P 5500, NYSE Composite, and FT Wilshire 5000 Index closed at all-time highs.

The energy futures closed mixed but the metals – precious and industrial – futures closed down. The soft commodities closed mixed. The US treasury yields were up, and bonds down.

From Briefing.com

For the most part, the stock market was in a restful state in today’s trade until a late rally effort finished off a very good third quarter.

[…]

The Treasury market reacted with yields backing up. The 2-yr note yield rose nine basis points to 3.65% while the 10-yr note yield jumped five basis points to 3.80%.

[…]

  • Nasdaq Composite: +21.2% YTD (+2.6% for Q3)
  • S&P 500: +20.8% YTD (+5.5% for Q3)
  • Dow Jones Industrial Average: +12.3% YTD (+8.2% for Q3)
  • S&P Midcap 400: +12.2% YTD (+6.6% for Q3)
  • Russell 2000: +10.0% YTD (+8.9% for Q3)

Reviewing today’s economic data:

  • The September Chicago PMI checked in at 46.6 (Briefing.com consensus 46.2) versus 46.1 in August.
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