Market Remarks

Morning Notes – Wednesday, October 9, 2024

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are a bit lower at 9:00 AM. Forming a cup-with-handle pattern.
  • Odds are for a sideways to an up day. Watch for a break below 5782.75 for a change in sentiments.
  • The notable economic data due during the day:
    • FOMC Meeting Minutes at 2:00 PM.
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: Up-Side
  • 15-Min: Side-Up
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5744.06, 5726.56, and 5714.456.
  • Critical resistance levels for the S&P 500 are 5757.60, 5765.14, and 5784.14.
  • The key levels for E-mini futures are 5806.75, the high at 3:45 PM on Monday and 5782.75, the low at 3:00 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2024) closed at 5800.75, and the index closed at 5751.13 – a spread of about +49.50 points; the futures closed at 5800.50; the fair value is +0.25.
  • Pre-NYSE session open, futures were a bit lower – at 9:00AM, the S&P 500 futures were down by -3.50, Dow by -27, and NASDAQ by -28.25.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Mumbai closed down. Sydney and Tokyo closed up. Seoul was closed.
  • European markets are mostly higher – Spain and Italy are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are lower.
    • Industrial metals are lower.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.017, up +28.4 basis points from two weeks ago.
    • The 30-year is at 4.296%, up +21.0 basis points.
    • The 2-year yield is at 3.967%, up +41.9 basis points.
    • The 10-Year-&-2-Year spread is at 0.050, down from 0.185.
    • The 30-Year-&-10-Year spread is at 0.279, down from 0.353.
  • VIX
    • At 21.46 @ 8:30 AM; down from the last close; above the 5-day SMA
    • Recent high = 23.76 on September 6; low = 14.90 on September 26; Sentiment: Risk-Neutral-to-Off

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

Weekly:
  • The week ending on October 4 was another relatively small green Spinning Rop candle at all-time highs.
    • Stochastic (9,1, 3): %K is above %D.
    • RSI-9 is above 65 and with a potential for a Bearish Divergence.
  • The week was up 12.90 or 0.2%; the 5-week ATR is 152.73.
  • Fourth up week in the last five weeks and seventh in the previous ten weeks
  • The weekly pivot point=5730.07, R1=5786.14, R2=5821.21; S1=5695.00, S2=5638.93; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A green candle with almost no lower shadow and a small upper shadow.
  • 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 again crossed above the %D.
    • RSI-9 turned up to just above 60 and is at or below the 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA.
  • Uptrend
2-Hour (E-mini futures)
  • Making lower higher and lower lows within a Horizontal Channel since 10:00 PM on September 18. 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 just above 60.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side
30-Minute (E-mini futures)
  • Making a Cup-with-Handle pattern.
    • RSI-21 is around 55.
    • Above EMA20, which is at/below EMA10 of EMA50.
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 5:15 AM.
  • The Bollinger Band is contracting.
  • Bias: Side-Up

Previous Session

Most major U.S. indices closed higher Tuesday, October 8 in mixed volume. Dow Jones Industrial Average and S&P 500 traded in lower volume. The major indices opened higher and moved higher with a brief pullback midday. Most major indices have alternatively closed up and down for several days. 

All but two S&P sectors – Energy and Materials – closed down. The dollar index closed higher at 102.30. The energy and metals – precious and industrial – futures closed down. The soft commodities closed mixed. The US treasury yields were down, and bonds were a bit up.

From Briefing.com

The stock market closed on a higher note on buy-the-dip interest after a soft start to the week. The Russell 2000 gained 0.1%, the Dow Jones Industrial Average closed 0.3% higher, the S&P 500 climbed 1.0%, and the Nasdaq Composite settled 1.5% higher.

[…]

The 10-yr yield settled one basis higher at 4.03% and the 2-yr yield settled two basis points lower at 3.98%. On a related note, today’s $58 billion 3-yr note sale met weak demand. 

[…]
  • Nasdaq Composite: +21.1% YTD
  • S&P 500: +20.6% YTD
  • Dow Jones Industrial Average: +11.7% YTD
  • S&P Midcap 400: +11.3% YTD
  • Russell 2000: +8.3% YTD

Reviewing today’s economic data:

  • September NFIB Small Business Optimism 91.5; Prior 91.2
  • August Trade Balance -$70.4 bln (Briefing.com consensus -$71.3 bln); Prior was revised to -$78.9 bln from -$78.8 bln
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