Morning Notes – Monday January 25, 2021

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a sideways to down day; watch for a break above 3841.75 and below 3822.25 for clarity
  • No key economic data report due during the day:

Directional Bias Before Open:

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Sid
  • 30-Min: Up-Side
  • 15-Min: Side-Down
  • 6-Min:  Side

Key Levels:

  • Critical support levels for S&P 500 are 3841.15, 3830.41, and 3816.22, and 3804.53
  • Critical resistance levels for S&P 500 are 3852.31, 3861.22, and 3863.30
  • Key levels for E-mini futures: break above 3841.75, the high of 8:15 AM and break below 3830.00, the low of 4:30 PM on Friday


  • On Friday at 4:00 PM, S&P futures (March 2021) closed at 3832.75 and the index closed at 3841.47 – a spread of about -8.75 points; futures closed at 3834.25 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures are mixed – at 8:15 AM, S&P 500 futures were up by +5.50; Dow down by -125, and NASDAQ up by +133.25

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai and Singapore closed down
  • European markets are mostly lower – Switzerland is up
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.091%, down 1.4 BP from two weeks ago;
    • 30-years is at 1.857%, down 0.6 BP;
    • 2-years yield is at 0.125%, down 1.2 BP;
    • The 10-Year-&-2-Year spread is at 0.966, down from 0.968
  • VIX
    • At 23.41 @ 7:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  29.19 on January 4; low =  20.99 on December 29
    • Sentiment: Risk-On-Neutral

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

  • Confirmed Uptrend
  • December 2020 was a green candle with a small gap and with almost no upper and lower shadows; all-time closing and intraday highs;
    • Stochastic %K above %D near 100;
    • RSI-9 above 70; broke above a downtrend line from January 2018
    • Above the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
  • The week ending on January 22 was a green candle at all-time highs with a small upper shadow and almost no lower shadow;
    • Stochastic (9,1, 3): %K is crossing above %D
    • RSI (9) is above 70
  • The week was up +73.22 or +1.9%; the 5-week ATR is 92.83
  • An up week; third in the last five weeks and sixth in the last ten weeks
  • The weekly week pivot point=3827.76, R1=3875.16, R2=3908.84; S1=3794.08, S2=3746.68; R1/R2 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23
  • A small candle with small upper and lower shadows;
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 61.8% extension target near 3750.00 is achieved; 100% extension target is near 3900.00
    • %K  crossed below %D and near 90;
    • RSI-9 is turning down near 65; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Drifting sideways to down since 12:00 on January 21 AM from the all-time high of 3859.00;
    • RSI-21 just below 50
  • At/below EMA20, above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving within a trading range between 3859.50 and 3816.00;
  • RSI-21 is around 40
    • %K is crisscrossing %D around 30
    • Below EMA10 of EMA50, which is below EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 10:45 PM;
  • The Bollinger Band is expanding slightly since 5:00 AM with price walking down the lower band
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower since 6:30 AM
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly lower on Friday, January 22 in mixed volume. NASDAQ Composite and Russell 2000 closed higher. Dow Jone Industrial Average, S&P 500, and Russell 2000 traded in higher volume. Most indices made small candles and are maintaining the break above a small trading range that was in effect since January 7. Major indices are near all-time highs.

For the week, most major indices closed higher in lower volume. Dow Jones Transportation Average closed down. Asai was mostly higher and Europe was mixed. The dollar index was down, energy futures were down too but precious metals and most industrial metals were up. Soft commodities were mixed and the US Treasury yields were mixed too.


The Nasdaq Composite (+0.1%) eked out another closing record high on Friday, overcoming a negative start and capping off a strong week for the tech-sensitive index. The Russell 2000 rallied 1.3% and closed at a record high in a steady advance off opening lows, while the S&P 500 (-0.3%) and Dow Jones Industrial Average (-0.6%) closed lower.


These headlines stirred lingering growth concerns, which were manifested in the underperformance of the S&P 500 financials (-0.7%), industrials (-0.5%), and energy (-0.5%) sectors. Oil prices ($52.33/bbl, -0.79, -1.5%) also softened up, and the growth-sensitive 10-yr Treasury note yield decreased two basis points to 1.09% amid an uptick in demand.

Most sectors gradually pared losses throughout the day, while the counter-cyclical real estate (+0.3%), utilities (+0.2%), and communication services (+0.1%) sectors finished with modest gains.


The 2-yr yield was unchanged at 0.12%. The U.S. Dollar Index increased 0.1% to 90.23.

  • Existing home sales increased 0.7% m/m in December to a seasonally adjusted annual rate of 6.76 million ( consensus 6.50 million).
  • […]
  • The January IHS flash Markit Manufacturing PMI checked in at 59.1 versus 57.1 in December; the January flash Services PMI checked in at 57.5 versus 54.8 in December.
  • Russell 2000 +9.8% YTD
  • Nasdaq Composite +5.1% YTD
  • S&P 500 +2.3% YTD
  • Dow Jones Industrial Average +1.3% YTD
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