Morning Notes – Thursday November 12, 2020

/ November 12, 2020

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a sideways to down day – watch for the break above 3576.00 and the break below 3510.00 for change of sentiments
  • Key economic data report:
    • CPI ( 0.1% est.; prev. 0.2%) at 8:30 AM
    • Core CPI (0.2% est.; prev. 0.2% ) at 8:30 AM
    • Unemployment Claims (730K est.; prev. 751K) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Resumed
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for S&P 500 are 3557.00, 3528.23, and 3511.91
  • Critical resistance levels for S&P 500 are 3581.16, 3596.13, and 3609.45
  • Key levels for E-mini futures: break above 3576.75, the high of 1:00 PM on Wednesday and break below 3506.50, the low of 10:30 AM on Tuesday

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (December 2020) closed at 3567.00 and the index closed at 3572.66 – a spread of about -5.75 points; futures closed at 3568.00 for the day; the fair value is -1.00
  • Pre-NYSE session open, futures are mixed – at 7:30 AM, S&P 500 futures were down by -10.75; Dow down by -172, and NASDAQ up by +13.00

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo closed up
  • European markets are lower
  • Currencies:
    Up Down
    • EUR/USD
    • USD/CAD
    • INR/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Gold
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Crude Oil
    • NatGas
    • Silver
    • Cotton
    • Cocoa
  • Bond
    • 10-years yield closed at 0.958%, down from November 10 close of 0.972%;
    • 30-years is at 1.739% down from 1.760%
    • 2-years yield is at 0.189% unchanged
    • The 10-Year-&-2-Year spread is at 0.769 down from 0.783
  • VIX
    • At 23.76 @ 7:00 AM; up +0.31 from the last close; below 5-day SMA;
    • Recent high =  41.16 on October 16; low =  22.41 on November 9
    • Sentiment: Risk-Off-to-Neutral

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

Monthly
  • Uptrend under pressure
  • October 2020 was a red candle with long upper shadow and smaller lower shadows;
    • Stochastic %K is below %D from above 90; potential %D Bearish Divergence
    • RSI-9 below 60 from near 70; below a downtrend line that it broke above briefly in August
    • Retreating from the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
Weekly:
  • The week ending on November 6 was a large green candle with small upper and lower shadows; the index opened above the previous week’s close and then traded higher for the rest of the week closing above its high
    • Stochastic (9,1, 3): %K crossed above %D; above 80
    • RSI (9) turned up from 50; above 60
  • The week was up +239.48 or +7.3%; the 5-week ATR is 164.10
  • An up week; third in the last five weeks and fourth in the last ten weeks
  • The weekly week pivot point=3439.41, R1=3599.08, R2=3688.72; S1=3349.77, S2=3190.10; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23 Under Pressure
Daily
  • A small green spinning top candle just above Tuesday’s high; above the upper bound of a symmetrical triangle – 50% extension target is near 3710.00; 61.8% extension target is near 3750.00; 100% extension target is near 3900.00
    • %K is crossing above %D; near 80; potential Bearish Divergence
    • RSI-9 moving along 70
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Moving sideways after bouncing up from a support area following a decline from the all-time high of 3668.00 at 8:00 AM on November 9; 38.2% Fibonacci Retracement achieved; trending up since 2:00 PM on October 30;
    • RSI-21 declined to around 50
  • At EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 4:00 PM on Monday between 3575.00 and 3510.00
    • RSI-21 moving sideways between 40 and 60
    • %K is below %D
  • Above EMA20; which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • Bollinger Band (20, 2.0) moving sideways since 9:45 PM on Monday
  • The Bollinger Band is relatively stable;
    • Stochastic (9, 1, 3): %K is crossing above %D around 30
  • Bias: Side

Previous Session

Major U.S. indices closed mixed on Wednesday, November 11 in lower volume. S&P 500, NASDAQ Composite, NYSE Composite, and Wilshire 5000 Total Market Index closed higher. Indices are still in a holding pattern with the past few day’s bullish move still intact. Russell 2000 but others are struggling.

The Bond market was closed due to Veterans Day.

From Briefing.com:

The S&P 500 gained 0.8% on Wednesday, guided by renewed leadership in the mega-cap/growth stocks at the expense of the cyclical stocks that had outperformed recently. The Nasdaq Composite, powered by its mega-cap components, rose 2.1%, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.01%) closed fractionally lower.

[…]

In turn, the materials (-1.4%), industrials (-0.9%), energy (-0.8%), and financials (-0.5%) sectors succumbed to minor profit-taking interest.

[…]

Specifically, the information technology (+2.4%) and consumer discretionary (+1.5%) sectors meaningfully outperformed the broader market, followed by respectable gains in the consumer staples (+0.9%) and real estate (+0.8%) sectors.

[…]

The U.S. Treasury market was closed for Veterans Day, leaving the 10-yr yield at 0.98% following yesterday’s settlement price. The U.S. Dollar Index increased 0.3% to 92.99. WTI crude futures increased 0.3%, or $0.12, to $41.49/bbl.

[…]
  • Nasdaq Composite +31.4% YTD
  • S&P 500 +10.6% YTD
  • Russell 2000 +4.1% YTD
  • Dow Jones Industrial Average +3.0% YTD
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