Morning Notes – Tuesday September 14, 2021

Directional Bias For The Day:

  • S&P Futures moved higher by more than 20 points after the 8:30 AM economic report;
  • The odds have changed to an up day from sideways-to-down – watch for a break below 4451.50 for a change of fortunes
  • Key economic data report due during the day:
    • CPI ( 0.3% vs. 0.4% est.; prev. 0.5%) at 8:30 AM
    • Core CPI ( 0.1% vs. 0.3% est.; prev. 0.3% ) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4445.70, 4432.63, and 4425.32
  • Critical resistance levels for S&P 500 are 4475.51, 4492.99, and 4497.78
  • Key levels for E-mini futures: break above 4468.00, the high of 4:30 AM and break below 4451.50, the low of 7:30 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (December 2021) closed at 4459.50 and the index closed at 4468.73 – a spread of about -9.25 points; futures closed at 4459.50 for the day; the fair value is +0.00
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -3.75; Dow by -45; and NASDAQ by -23.75

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Hong Kong closed down
  • European markets are mostly lower – Italy is up
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • Dollar index
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.324%, up +3.9 basis points from two weeks ago;
    • 30-years is at 1.905%, up +0.5 basis points;
    • 2-years yield is at 0.217%, up +1.0 basis points;
    • The 10-Year-&-2-Year spread is at 1.107, up from 1.078
  • VIX
    • At 19.31 @ 6:45 AM; down from the last close; at/above 5-day SMA;
    • Recent high =  24.74 on August 19; low =  15.19 on August 13
    • Sentiment: Risk-On-Neutral

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

Monthly
  • Confirmed Uptrend
  • August 2021 was a green candle with small upper and lower shadows; at all-time closing and intra-month highs;
    • Stochastic (9, 1, 3): %K above %D near 100;
    • RSI-9 above 80;
    • Above the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows
Weekly:
  • The week ending on September 10 was a relatively large red candle small almost no upper and lower shadows; near all-time highs
    • Stochastic (9,1, 3): %K crossed below %D from near 100
    • RSI-9 has declined to near 60
  • The week was down -76.85 or -1.7%; the 5-week ATR is 68.41
  • A down week; second in the last five weeks, and fourth in the last ten weeks
  • The weekly pivot point=4483.87, R1=4510.09, R2=4561.59; S1=4432.37, S2=4406.15; S1/S2/S3 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively small Harami Doji
    • Stochastic (9, 1, 3): %K is crossing above %D from near 0;
    • RSI-9 is turning up near 40; below 8-day EMA;
  • At/below 20-day EMA; above 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Drifting down from 4548.00 at 8:00 AM on September 6 – lower highs and lower lows;
    • RSI-21 is turning down below 40
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Trending down since 9:30 AM on September 6;  sideways to down since 4:00 PM on Monday
    • RSI-21 is moving below 50
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 10:00 PM;
  • The Bollinger Band is expanded but stable since 3:15 AM
    • Stochastic (9, 1, 3): %K crossed above %D at 7:30 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly higher on Monday, September 13 in mostly higher volume. NASDAQ Composite closed lower.  Dow Jones Transportation Average and S&P 500 traded in lower volume. The major indices opened higher but then immediately declined and went negative for the day before recovering and closing a bit higher for the day.

From Briefing.com:

The S&P 500 snapped a five-session losing streak on Monday with a 0.2% gain, although it closed well off session highs. The Nasdaq Composite decreased 0.1%, while the Dow Jones Industrial Average (+0.8%) and Russell 2000 (+0.6%) outperformed amid strength in energy and financial stocks.

[…]

Eight of the 11 S&P 500 sectors ended the session in positive territory, led by energy (+2.9%) and financials (+1.1%) with 3% and 1% gains, respectively.

[…]

The health care sector (-0.6%) was today’s laggard

[…]
  • The Treasury Budget for August showed a $170.64 bln deficit in August, versus a $200.01 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $302.05 bln. August marked the 23rd consecutive month that the Treasury has seen a budget deficit.
[…]
  • S&P 500 +19.0% YTD
  • Nasdaq Composite +17.2% YTD
  • Dow Jones Industrial Average +13.9% YTD
  • Russell 2000 +13.5% YTD

Overseas: 

  • Europe: DAX +0.6%, FTSE +0.6%, CAC +0.2%
  • Asia: Nikkei +0.2%, Hang Seng -1.5%, Shanghai +0.3%

Commodities: 

  • Crude Oil +0.72 @ 70.47
  • Nat Gas +0.30 @ 5.23
  • Gold +2.30 @ 1794.30
  • Silver -0.12 @ 23.79
  • Copper -0.08 @ 4.37
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