Market Remarks

Morning Notes – Monday, February 3, 2025

Sunil Sharma

Directional Bias for the Day:

  • S&P Futures are lower at 9:00 AM. Futures have been sharply down.
  • Odds are for a down day. Watch for a break above 5988.75 for clarity.
  • The notable economic data due during the day:
    • Final Manufacturing PMI (51.2 vs. 50.1 est.; prev. 50.1) at 9:45 AM.
    • ISM Manufacturing PMI (49.3 est.; prev. 49.3) at 10:00 AM.
    • ISM Construction Prices (52.6 est.; prev. 52.5) at 10:00 AM.
    • Construction Spending (0.3% est.; prev. 0.30%) at 10:00 AM.
  • Weekly: Uptrend
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5952.53, 5930.72, and 5916.28.
  • Critical resistance levels for the S&P 500 are 5962.92, 5979.53, and 6017.17.
  • The key levels for E-mini futures are 5988.75, the high at 3:15 AM, and 5936.50, the low at 11:30 AM.

Pre-Open

  • On Friday at 4:00 PM, S&P futures (March 2025) closed at 6064.75, and the index closed at 6040.53 – a spread of about +23.75 points; the futures closed at 6067.25; the fair value is -2.50.
  • Pre-NYSE session open, futures were lower – at 9:00 AM, the S&P 500 futures were down by -103.50, Dow by -659 and NASDAQ by -402.00.

Markets Around the World

  • Markets in the East closed lower.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • USD/CHF
  • Dollar index
  • USD/JPY
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower.
    • 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 4.541, down -8.9 basis points from two weeks ago.
    • The 30-year is at 4.790%, down -7.0 basis points.
    • The 2-year yield is at 4.216%, down -7.5 basis points.
    • The 10-Year-&-2-Year spread is at 0.325, up from 0.339.
    • The 30-Year-&-10-Year spread is at 0.249, up from 0.230.
  • VIX
    • At 19.68 @ 8:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 22.51 on January 27; low = 14.90 on January 31; Sentiment: Risk-Off

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

Weekly:
  • A tear-drop green candle closing near the lows of previous week, a sign of weakness.
    • Stochastic (9,1, 3): %K crossed below %D. Potential Bearish Divergence.
    • RSI-9 dipped below 60. Potential Bearish Divergence.
  • The week was down -60.71 or -1.0%; the 5-week ATR is 174.98.
  • Third down week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=6041.45; R1=6119.99, 6199.44; S1=5962.00, S2=5883.47; S1 pivot level was breached
  • Above 10-week EMA; 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A Bearish Engulfing candle with a small upper and lower shadows, retracing from the upper bound of January 27th’s down gap.
    • Stochastic (9, 1, 3): %K is below %D, and falling.
    • RSI-9 has turned down to below 55 and is below the 8-day EMA.
  • Above 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Gapped won at the week’s open on Sunday. Below an up-sloping regression channel – a bearish move.
    • RSI-9 is below 30.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Down
30-Minute (E-mini futures)
  • Moving within a range after opening by more 70 points below Friday’s close of 6065.50.
    • RSI-21 is just below 40.
    • At/below EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways to down since 6:00 AM.
  • The Bollinger Band is narrow and stable since 6:00 AM.
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Friday, January 31 in mostly higher volume. Dow Jones Transportation Average traded in higher volume. The major indices opened higher and then traded higher until 1:00 PM, when they declined sharply following the tariff news from the White House.

For t\e week, the major US indices closed mostly lower in higher volume. The Asian markets were mixed, and the European markets were up. The dollar index was up; energy futures were down. the precious metals were up, the industrial metals and the soft commodities were mixed. The US Treasury yields closed down, and the bonds rose.

From Briefing.com

The stock market was trading in good form for most of the morning, but stocks took a sharp turn lower in the early afternoon. The deterioration coincided with the White House confirming that 25% tariffs for Canada and Mexico, and a 10% tariff for China, will begin tomorrow (February 1). The basis for the tariff actions were tied to immigration, trade deficit, and fentanyl issues.

[…]

The Dow Jones Industrial Average fell 0.8%, the S&P 500 registered a 0.5% decline, and the Nasdaq Composite was 0.3% lower than yesterday.

[…]

Treasury yields jumped in response to the tariff talk, which put added pressure on equities. The 10-yr yield settled six basis points higher than yesterday at 4.57% after hitting 4.50% earlier and the 2-yr yield rose four basis points to 4.24%.

[…]
  • Dow Jones Industrial Average: +4.7.% YTD
  • S&P Midcap 400: +3.8% YTD
  • Russell 2000: +2.6% YTD
  • S&P 500: +2.7% YTD
  • Nasdaq Composite: +1.6% YTD

Reviewing today’s economic data:

  • December Personal Income 0.4% (Briefing.com consensus 0.4%); Prior 0.3%, December Personal Spending 0.7% (Briefing.com consensus 0.5%); Prior was revised to 0.6% from 0.4%, December PCE Prices 0.3% (Briefing.com consensus 0.3%); Prior 0.1%, December PCE Prices – Core 0.2% (Briefing.com consensus 0.2%); Prior 0.1%
  • Q4 Employment Cost Index 0.9% (Briefing.com consensus 0.9%); Prior 0.8%
  • January Chicago PMI 39.5 (Briefing.com consensus 41.5); Prior 36.9
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