Morning Notes – Wednesday, October 16, 2024

/ October 16, 2024

Directional Bias for the Day:

  • S&P Futures are a little higher at 8:30 AM. Forming an up-sloping flag, a bearish pattern, since yesterday’s close after declining during the day.
  • Odds are for a sideways to a down day. Watch for a break above 5869.00 or a break below 5850.00 for clarity.
  • The notable economic data due during the day:
    • Import prices (-0.4% vs. -0.3 est.; prev. -0.2%) at 8:30 AM.
    • CB Leading Index (prev. 0.1%) at 10:30 AM
  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5800.71, 5764.76, and 5726.56.
  • Critical resistance levels for the S&P 500 are 5835.88, 5846.82, and 5871.41.
  • The key levels for E-mini futures are 5869.00, the high at 12:00 AM and 5850.00, the low at 3:30 PM on Tuesday.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2024) closed at 5863.00, and the index closed at 5815.26 – a spread of about +48.25 points; the futures closed at 5862.75; the fair value is +0.75.
  • Pre-NYSE session open, futures were a little higher – at 8:15AM, the S&P 500 futures were up by +3.50, Dow by +29, and NASDAQ by +20.25.

Markets Around the World

  • Markets in the East closed mostly lower – Shanghai closed up.
  • European markets are mostly lower – the UK and Spain are higher.
  • 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 mixed.
    • Precious metals are mixed.
    • Industrial metals are mixed.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.037, up +30.0 basis points from two weeks ago.
    • The 30-year is at 4.321%, up +24.8 basis points.
    • The 2-year yield is at 3.956%, up +34.1 basis points.
    • The 10-Year-&-2-Year spread is at 0.081, down from 0.122.
    • The 30-Year-&-10-Year spread is at 0.284, down from 0.336.
  • VIX
    • At 20.70 @ 8:15 AM; up from the last close; above the 5-day SMA
    • Recent high = 23.14 on October 8; low = 14.90 on September 26; Sentiment: Risk-Off -to-Neutral

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

Weekly:
  • The week ending on October 11 was a green candle at all-time highs.
    • Stochastic (9,1, 3): %K is above %D and near 100.
    • RSI-9 is near 70 with a potential for a Bearish Divergence.
  • The week was up 63.96 or 1.1%; the 5-week ATR is 130.63.
  • Fifth up week in the last five weeks and eight in the previous ten weeks
  • The weekly pivot point=5774.67, R1=5862.49, R2=5909.95; S1=5727.21, S2=5639.39; R1/R2/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A Bearish Engulfing candle with almost no upper shadow and a small lower shadow at all-time highs.
  • On September 19, the cash index broke above a resistance level, the high of August 30. The 61.8% extension target around 5800.00 is achieved. The 100% extension target is around 5900.00 and the 161.8% extension target is around 6053.00.
    • Stochastic (9, 1, 3): %K crossed below the %D.
    • RSI-9 turned down to just above 60 from above 70; 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)
  • Down 50 points from all-time highs after breaking above the upper bound of a horizontal channel and achieving the 161.8% extension target of around 5905.00.
    • RSI-21 has bounced up to around 35 from below 30.
    • Below EMA20, but at/above EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to up since 3:00 PM on Tuesday after declining during the day.
    • RSI-21 is around 45.
    • At/above EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 8:45 PM.
  • The Bollinger Band is narrow.
  • Bias: Down-Side

Previous Session

Most major U.S. indices closed mostly lower Tuesday, October 15 in higher volume. Russell 2000 closed up. Most major indices made Bearish Engulfing candle at all-time highs. Marke opened flat and then traded lower for the rest of the day.

The S&P sectors closed mixed – five down and six up. The dollar index closed down at 103.06. The energy futures closed mixed, the precious metals closed up, the industrial metals closed down, and the soft commodities closed mixed. The US treasury yields were down, and bonds up.

From Briefing.com

The S&P 500 (-0.8%), Nasdaq Composite (-1.0%), and Dow Jones Industrial Average (-0.8%) settled with solid losses while the Russell 2000 eked out a 0.1% gain.

[…]

The 10-yr yield settled three basis points lower at 4.04% and the 2-yr yield settled one basis point higher at 3.95%.

  • Nasdaq Composite: +22.0% YTD
  • S&P 500: +21.9% YTD
  • S&P Midcap 400: +13.8% YTD
  • Dow Jones Industrial Average: +13.4% YTD
  • Russell 2000: +11.0% YTD
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