Morning Notes – Friday June 19, 2020

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day with elevated volatility; – watch for break below 3120,00 and 3102.00 for change of sentiments
  • Key economic data due:
    • Current Account ( -104B vs. -101B est.; prev. -104B) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Uptrend since March 23 under pressure
  • Daily: Uptrend since March 23 under pressure
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for S&P 500 are 3119.84, 3098.68 and 3093.51
  • Critical resistance levels for S&P 500 are 3153.45, 3181.49 and 3213.79
  • Key levels for E-mini futures: break above 3147.00, the high of 4:00 AM on June 17 and break below 3102.00, the low of 1:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2020) closed at 3103.00 and the index closed at 3115.34 – a spread of about -12.25 points; futures closed at 3098.00 for the day; the fair value is +5.00
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +37.50; Dow by +344 and NASDAQ by +103.75

Markets Around The World

  • Markets in the East closed mostly higher – Singapore was down
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Cotton
    • Cocoa
    • Palladium
    • Coffee
  • Bond
    • 10-yrs yield is at 0.733%, up from June 18 close of 0.694;
    • 30-years is at 1.517%,up from 1.461%
    • 2-years yield is at 0.202% up from 0.198%
    • The 10-Year-&-2-Year spread is at 0.531 up from 0.496
  • VIX
    • Is at 31.05; down -1.89 from June 18 close; below 5-day SMA;
    • Recent high 44.44 on June 15; low 23.54 on June 5
    • Sentiment: Risk-On

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

Monthly
  • Uptrend under pressure
  • May 2020 was a green candle with small upper shadow and a lower shadows that was one third of the real body;
    • Stochastic %K is above %D and above 60; %K Bearish Divergence in January
    • RSI-9 turning up after declining to 34.91, the lowest level since April 2009, from above 75 in January and Bearish Divergence
    • Regaining the middle band of the 120-month regression channel after only third break of channel since 2009 and first close below it
  • Sequence of higher highs and higher lows broken
Weekly:
  • The week ending on June 12 was a large red candle that could pass as an almost Bearish Engulfing formation; small upper and lower shadows but in comparison to the real body
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) turned down to near 50
  • The week was down -152.62 or -4.8%; the 5-week ATR is 167.57
  • The weekly week pivot point =3086.30, R1=3188.14, R2=3334.96; S1=2939.48, S2=2837.65; S1 pivot level was breached
  • A down week; second in last five weeks and fourth in last ten weeks
  • All time high of 3393.52, the last swing high, was during the week of February 17; broke below the low of the week of December 24, 2018; support near 2193.81, the high during the week of August 15, 2016; sequence of higher highs and higher lows broken
  • Above 10-week EMA; at/below 39-week SMA; above 89-week SMA
  • Uptrend since March 23 is under pressure
Daily
  • A small green candle that opened below Wednesday’s close but closed slightly above it
    • %K is at %D but moving down;
    • RSI-9 is above 50; below 8-day RSI;
  • Above 20-day EMA; above 200-day SMA, above 50-day EMA and 100-day
  • Uptrend since March 23 is under pressure
2-Hour (E-mini futures)
  • Moving sideways since 10:00 PM on Monday
    • RSI-21 has moved up above 60 from near 35
    • %K is crisscrossing %D higher
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 10:30 PM on June 15; breaking above a descending triangle – resistance is at 3147.00; 61.8% extension target is near 3189.00 and 100% extension target is near 3224.00
    • RSI-21 above 50 since 10:00 AM on Thursday
    • %K is crisscrossing %D higher;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • Bollinger Band (20, 2.0) moving sideways to up since 10:45 AM on June 18
  • The Bollinger Band is relatively stable; price is walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Thursday, June 18 in lower volume. Dow Jones Industrial Average, Dow Jones Transportation Average and NYSE Composite closed down. S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index closed up. Day’s range was relatively small.

From Briefing.com:

The S&P 500 increased 0.1% on Thursday after trading near its flat line for most of the session amid mixed economic signals. The Dow Jones Industrial Average (-0.2%), Nasdaq Composite (+0.3%), and Russell 2000 (unch) also closed little changed.

[…]

U.S. Treasuries finished mixed with longer-dated tenors closing higher. The 2-yr yield was unchanged at 0.19%, while the 10-yr yield declined four basis points to 0.69%. The U.S. Dollar Index increased 0.3% to 97.47 amid relative weakness in the British pound after the Bank of England increased its asset purchase program to GBP745 billion.

  • Initial jobless claims for the week ending June 13 were higher than expected (and still high) at 1.508 million (Briefing.com consensus 1.350 million) versus 1.566 million in the prior week.┬áContinuing jobless claims for the week ending June 6 decreased by 62,000 to 20.544 million.
[…]
  • The Conference Board’s Leading Economic Index (LEI) increased 2.8% in May (Briefing.com consensus 2.5%) following a downwardly revised 6.1% decline (from -4.4%) in April. It was the first increase in the LEI since January.
[…]
  • The Philadelphia Fed Index for June unexpectedly increased to 27.5 (Briefing.com consensus -25.0) from -43.1 in May.

 

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