Market Remarks

Morning Notes – Tuesday June 22, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher;
  • The odds are for an up-to-sideways day with elevated volatility – watch for a break below 4205.75 for a change of sentiments
  • Key economic data report due during the day:
    • Fed Chair Powell’s Testimony at 2:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4219.64, 4212.77, and 4206.86
  • Critical resistance levels for S&P 500 are 4232.29, 4238.86, and 4248.15
  • Key levels for E-mini futures: break above 4226.25, the high of 12:45 AM and break below 4205.75, the low of 4:45 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2021) closed at 4214.00 and the index closed at 4224.79 – a spread of about -10.75 points; futures closed at 4213.75 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +5.25; Dow by +26, and NASDAQ by +36.50

Markets Around The World

  • Markets in the East closed mostly higher – Hong Kong and Singapore closed lower
  • European markets are mixed – Germany, the UK, France, and STOXX 600 are higher; Spain, Itlay, and Switzerland are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.484%, down -8.5 basis points from two weeks ago;
    • 30-years is at 2.104%, down -14.7 basis points;
    • 2-years yield is at 0.247%, up +8.6 basis points;
    • The 10-Year-&-2-Year spread is at 1.237, down from 1.408
  • VIX
    • At 17.70 @ 6:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  21.82 on June 21; low =  15.04 on June 14
    • Sentiment: Risk-Neutral-On

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

Monthly
  • Confirmed Uptrend
  • May 2021 was a Doji with a small upper shadow and a long lower shadow; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 80; 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
Weekly:
  • The week ending on June 18 was a Bearish Engulfing candle at all-time highs with almost no lower shadow and a small upper shadow
    • Stochastic (9,1, 3): %K crossed below %D;
    • RSI (9) is just below 60
  • The week was down -80.99 or -1.9%; the 5-week ATR is 78.02
  • A down week; second in the last five weeks, and fourth in the last ten weeks
  • The weekly week pivot point=4196.00, R1=4227.61, R2=4288.76; S1=4134.85, S2=4103.24; S1/S2/S3 pivot levels were breached
  • Below 10-week EMA; above 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A Bullish Engulfing candle with almost no upper shadow and lower shadows;
    • %K crossed above %D; near 65
    • RSI-9 bounced above 50 from just above 30; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Moving up since 10:00 PM on June 20; sideways to up since 2:00 PM on Monday;
    • RSI-21 is around 65
    • Above EMA20; which is at/below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Price bounced up to where it was on June 17 after a decline of almost 100 points; moving sideways-to-up since 4:00 PM on Monday
    • RSI-21 is around 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 3:30 PM on Monday
  • The Bollinger Band is expanding slightly since 2:45 AM; price first walked down the lower band and then bounced up to the upper band
    • Stochastic (9, 1, 3): %K crossed below %D at 7:30 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Monday, June 21 in lower volume. Most indices made Bullish Engulfing candles. The indices opened higher and then traded higher for the rest of the day.

From Briefing.com:

The S&P 500 rose 1.4% on Monday in a rebound rally led by the value/cyclical stocks. The Dow Jones Industrial Average (+1.8%) and Russell 2000 (+2.2%) outpaced the benchmark index following poor performances last week, while the Nasdaq Composite (+0.8%) gained 0.8%. […]

All 11 S&P 500 sectors and all 30 Dow components finished in positive territory, with the biggest gains scored in the cyclical sectors that sold off last week — energy (+4.3%), financials (+2.4%), industrials (+2.2%), and materials (+2.1%). The consumer discretionary sector (+0.5%) increased the least with a modest gain.

[…]

The 10-yr yield increased three basis points to 1.48%, while the 2-yr yield decreased one basis point to 0.25%. The U.S. Dollar Index declined 0.4% to 91.86, providing some relief for commodities like WTI crude ($73.64/bbl, +1.97, +2.8%) and copper ($4.184/lb, +0.03, +0.6%).

[…]
  • Russell 2000 +15.8% YTD
  • S&P 500 +12.5% YTD
  • Dow Jones Industrial Average +10.7% YTD
  • Nasdaq Composite +9.7% YTD

Overseas: 

  • Europe: DAX +1.0%, FTSE +0.6%, CAC +0.5%
  • Asia: Nikkei -3.3%, Hang Seng -1.0%, Shanghai +0.1%

Commodities: 

  • Crude Oil +1.97 @ 73.64
  • Nat Gas -0.01 @ 3.20
  • Gold +14.30 @ 1783.00
  • Silver +0.05 @ 26.02
  • Copper +0.03 @ 4.18
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