Morning Notes – Monday April 19, 2021

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down day with a good chance of sideways move from pre-open levels around 4165.00 – watch for a break above 4174.75 and below 4160.75 for clarity
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4174.86, 4161.46, and 4149.40
  • Critical resistance levels for S&P 500 are 4191.31, 4203.07, and 4214.83
  • Key levels for E-mini futures: break above 4174.75, the high of 4:00 AM and break below 4160.75, the low of 8:00 PM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 4177.25 and the index closed at 4185.47 – a spread of about -8.25 points; futures closed at 4176.25 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -9.75; Dow by -68, and NASDAQ by -62.75

Markets Around The World

  • Markets in the East closed mostly higher
  • European markets are mixed – Germany, the UK, and Switzerland are down
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.592%, down -8.7 basis points from two weeks ago;
    • 30-years is at 2.284%, down -5.6 basis points;
    • 2-years yield is at 0.157%, down -0.3 basis points;
    • The 10-Year-&-2-Year spread is at 1.437, down from 1.519
  • VIX
    • At 17.20 @ 8:00 AM; up from the last close; above 5-day SMA;
    • Recent high =¬† 23.55 on March 25; low =¬† 15.38 on April 14
    • Sentiment: Risk-Off

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

Monthly
  • Confirmed Uptrend
  • March 2021 was a green candle with a small upper shadow and a lower shadow almost equal to the real body; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 75; 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
Weekly:
  • The week ending on April 9 was a green candle with almost no upper and lower shadows; at all-time highs
    • Stochastic (9,1, 3): %K is crossing below %D; near 100
    • RSI (9) is above 75
  • The week was up +56.67 or +1.4%; the 5-week ATR is 97.06
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4163.87, R1=4212.91, R2=4240.91; S1=4136.42, S2=4087.93; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle with small upper shadow and almost no lower shadow; at all-time intraday and closing highs
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 161.8% extension target near 4140.00 levels is achieved
    • %K has crossed below %D; above 90
    • RSI-9 is near 80; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Trending up since 10:00 AM on March 25; at all-time highs; trending sideways since 6:00 AM on Friday
    • Broke above a down-sloping flag on March 26; the 100% extension target near 4100.00 is achieved; the 161.8% extension target is near 4260.00
    • RSI-21 has declined below 50 from above 80 an after making a Bearish Divergence
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways since 5:30 AM on Friday; drifting down since 3:30 PM on Friday
    • RSI-21 is below 50
    • 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 4:30 AM with price drifting down
    • Stochastic (9, 1, 3): %K is above %D since 8:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, April 16 in mostly higher volume. Dow Jones Transportation Average traded down in lower volume. Most indices closed at all-time highs.

For the week, major US indices closed higher in mostly higher volume. Markets in Asia were mixed but Europe was up. The dollar index was down and most commodities were up and the US Treasury yields declined for the week.

From Briefing.com:

The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.5%) set intraday and closing record highs on Friday in a mechanical grind higher to end the week. The Nasdaq Composite (+0.1%) and Russell 2000 (+0.3%) posted smaller gains.

[…]

On the downside, the information technology sector (-0.03%), which is the most heavily-weighed sector in the S&P 500, limited the index performance with a fractional decline amid a rebound in long-term interest rates. The energy sector (-0.9%) was the weakest performer amid lower oil prices ($63.16, -0.28, -0.4%).

The 10-yr yield increased four basis points to 1.57% after dropping 11 basis points on Thursday.

[…]
  • Housing starts surged 19.4% month-over-month in March to a seasonally adjusted annual rate of 1.739 million units (Briefing.com consensus 1.621 million), bolstered by a 15.3% increase in single-family starts.¬†Building permits increased 2.7% month-over-month to 1.766 million (Briefing.com consensus 1.750 million), helped by a 4.6% increase in single-family permits.
  • […]
  • The preliminary reading for the University of Michigan Consumer Sentiment Index for April checked in at 86.5 (Briefing.com consensus 88.0), up from the final reading of 84.9 for March. This is the highest reading in a year and was paced by improved attitudes on current conditions that were helped by job gains, rising vaccination rates, low interest rates, and fiscal stimulus.
[…]
  • Russell 2000 +14.6% YTD
  • Dow Jones Industrial Average +11.7% YTD
  • S&P 500 +11.4% YTD
  • Nasdaq Composite +9.0% YTD
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