Morning Notes – Monday March 22, 2021

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for a sideways day with uncertain volatility – watch for a break above 3911.00 and a break below 3892.25 for clarity
  • Key economic data report due during the day:
    • Existing Home Sales ( 8.55M est.; prev. 6.69M) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3911.67, 3899.15, and 3886.75
  • Critical resistance levels for S&P 500 are 3921.88, 3930.12, and 3943.37
  • Key levels for E-mini futures: break above 3911.00, the high of 7:30 AM and break below 3892.25, the low of 5:15 AM


  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 3897.00 and the index closed at 3913.10 – a spread of about -16.00 points; futures closed at 3899.75 for the day; the fair value is -2.75
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were up by +7.00; Dow down by -29, and NASDAQ up by +86.50

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai and Sydney were up
  • European markets are mostly higher – France and Spain are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.732%, up 17.8 basis points from two weeks ago;
    • 30-years is at 2.451%, up 16.3 basis points;
    • 2-years yield is at 0.161%, up 2.4 basis points;
    • The 10-Year-&-2-Year spread is at 1.571, up from 1.417
  • VIX
    • At 21.22 @ 6:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  31.90 on March 4; low =  18.95 on March 18
    • Sentiment: Risk-Off-to-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 March 19 was a small red spinning top Harami at all-time highs
    • Stochastic (9,1, 3): %K is crossing below %D around 75
    • RSI (9) is above 60 but turning down
  • The week was down -30.24 or -0.8%; the 5-week ATR is 126.76
  • A down week; third in the last five weeks, and fifth in the last ten weeks
  • The weekly week pivot point=3927.91, R1=3969.06, R2=4025.03; S1=3871.94, S2=3830.79; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
  • A small Doji candle at 20-day EMA; near all-time highs;
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 100% extension target near 3900.00 is achieved; 161.8% extension target is near 4140.00 levels
    • %K  is below %D; below 50
    • RSI-9 just above 50; below 8-day EMA
  • At/above 20-day EMA; above 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Moving down since 8:00 PM on March 17 from the all-time high of 3978.50; broke the sequence of upper highs and upper lows since March 4; broke below a support level around 3900.00 before bouncing above it
    • RSI-21 bouncing from below 30 to just above 50; Bullish Divergence at 10:00 AM on Friday
  • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
    • Moving sideways since 3:00 PM on Friday between 3923.50 and 3875.00; A congestion zone spread over many days
      • RSI-21 just below 50
      • Above EMA10 of EMA50, which is above EMA20
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways with a minor down bias since 9:30 PM on Thursday;
  • The Bollinger Band was relatively stable and is expanding a bit since 6:45 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower from above 90
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mixed on Friday, March 19 in mixed volume. Dow Jones Industrial Average, S&P 500, and NYSE Composite closed lower. NASDAQ Composite, Dow Jones Transportation Average, Russell 2000, and Wilshire 5000 Total Market Index closed higher. S&P 500 and NASDAQ traded in lower volume.

For the week, US indices mostly closed down in mixed volume. Dow Transportation Average closed up. Asian exchanges were mixed and European indices were mostly up. The dollar index closed higher, energy futures were down, precious metals were up, industrial metals were down and the soft commodities were mostly lower for the week. The US Treasury yields continue to trend higher.


The S&P 500 decreased 0.1% on Friday, as the broad market struggled to gain traction after the benchmark index briefly slipped below the 3900 level in early action. The Nasdaq Composite (+0.8%) and Russell 2000 (+0.9%) reclaimed early losses and closed higher after underperforming yesterday, while the Dow Jones Industrial Average (-0.7%) underperformed in the red.

Like the major indices, sector performances were mixed: six S&P 500 sectors closed lower, while five closed higher. The communication services (+0.8%) and consumer discretionary (+0.8%) sectors finished as leaders amid some mega-cap support; conversely, the financials (-1.2%), real estate (-1.3%), industrials (-0.7%), and materials (-0.5%) sectors lagged.


The 10-yr yield was trading at 1.68% pre-announcement, then rose to 1.74% before settling unchanged at 1.73%. The 2-yr yield decreased one basis point to 0.16%. The U.S. Dollar Index increased 0.1% to 91.96. WTI crude futures ($61.45/bbl, +1.45, +2.4%) rebounded 2%, trimming its weekly decline to 6%.

  • Russell 2000 +15.8% YTD
  • Dow Jones Industrial Average +6.6% YTD
  • S&P 500 +4.2% YTD
  • Nasdaq Composite +2.5% YTD
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