Morning Notes – Thursday, November 11, 2021

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM; moving up since 2:45 PM on Wednesday
  • The odds are for an up day with a good chance of sideways to down move from pre-open levels around 4658.00 – watch for a break above 4661.25 and a break below 4644.50 for clarity
  • No key economic data report due during the day:
    • The bond market is closed

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4653.04, 4640.49, and 4630.86
  • Critical resistance levels for S&P 500 are 4663.24, 4686.51, and 4691.32
  • Key levels for E-mini futures: break above 4661.25, the high of 5:00 AM and break below 4644.50, the low of 3:30 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (December 2021) closed at 4641.25 and the index closed at 4646.71 – a spread of about -5.50 points; futures closed at 4642.00 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +16.50; Dow by +15; and NASDAQ by +129.75

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and Singapore closed higher; Sydney, Mumbai, and Seoul closed lower
  • European markets are mostly higher – Spain is down;
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.560%, up +3.1 basis points from two weeks ago;
    • 30-years is at 1.916%, down -2.6 basis points;
    • 2-years yield is at 0.515%, up +1.1 basis points;
    • The 10-Year-&-2-Year spread is at 1.045, down from 1.025
    • The 30-Year-&-10-Year spread is at 0.356, down from 0.413
  • VIX
    • At 17.75 @ 8:30 AM; down from the last close; above 5-day SMA;
    • Recent high = 24.89 on October 1; low =  14.73 on November 4
    • Sentiment: Risk-On

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

Monthly
  • October 2021 was a Bullish Engulfing candle with  small lower shadow and almost no upper shadow; at all-time closing and intra-month highs;
    • Stochastic (9, 1, 3): %K above %D; near 100;
    • RSI-9 is turning up; above 75
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
Weekly:
  • The week ending on November 5 a relatively larger green candle at all-time highs
    • Stochastic (9,1, 3): %K is above %D; above 90
    • RSI-9 is above 70
  • The week was up +60.48 or +1.3%; the 5-week ATR  is 129.73
  • An up week; fourth in the last five weeks, and seventh in the previous ten weeks
  • The weekly pivot point=4583.61, R1=4629.85, R2=4654.33; S1=4559.13, S2=4512.89; R1 pivot level was breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Resumed
Daily
  • A red spinning top candle;
    • Stochastic (9, 1, 3): %K is below %D near 50
    • RSI-9 is just above 60; below 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Trending up since October 1 in steps; drifting down since 8:00 AM on November 8
    • RSI-21 declined from 85 on November 5 to below 30 on November 10; bounced up to 50;
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving down since 9:30 AM on November 8
    • RSI-21 bounced up above 50 from below 30 at 2:00 PM on Wednesday
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 7:30 PM;
  • The Bollinger Band is contracting slightly since 8:00 AM;
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower;
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Wednesday, November 10, in mostly higher volume. Dow Jones Transportation Average traded in lower volume. Major indices opened lower then bounced up a bit before declining. They recouped some losses near the close.

From Briefing.com:

The S&P 500 fell 0.8% on Wednesday, as the market cooled off amid hot CPI data for October and a corresponding pop in Treasury yields. The Nasdaq Composite (-1.7%) and Russell 2000 (-1.6%) declined more than 1.5%, while the Dow Jones Industrial Average fell 0.7%.

The information technology (-1.7%), communication services (-1.3%), and energy (-3.0%) sectors were the weakest sectors in the S&P 500 with losses between 1-3%. The defensive-oriented utilities (+0.7%), health care (+0.3%), and consumer staples (+0.3%) sectors were the only sectors that closed higher.

Specifying the data, the Consumer Price Index report showed total CPI was up 0.9% m/m (Briefing.com consensus +0.6%) and up 6.2% yr/yr — the largest 12-month increase since November 1990. Core CPI, which excludes food and energy, rose 0.6% m/m (Briefing.com consensus +0.4%) and was up 4.6% yr/yr.

[…]

The 2-yr yield settled higher by ten basis points to 0.50%, and the 10-yr yield settled higher by 13 points to 1.56%. WTI crude futures fell 3.5%, or $2.93, to $81.23/bbl amid bearish inventory data.

[…]
  • Total jobless claims for the week ending November 6 decreased by 4,000 to 267,000 (Briefing.com consensus 265,000), which is the lowest since March 14, 2020. Continuing claims for the week ending October 30 increased by 59,000 to 2.160 million.
[…]
  • S&P 500 +23.7% YTD
  • Nasdaq Composite +21.2% YTD
  • Russell 2000 +21.0% YTD
  • Dow Jones Industrial Average +17.9% YTD

Overseas: 

  • Europe: DAX +0.2%, FTSE +0.9%, CAC flat
  • Asia: Nikkei -0.6%, Hang Seng +0.7%, Shanghai -0.4%

Commodities: 

  • Crude Oil -2.98 @ 81.17
  • Nat Gas -0.07 @ 4.99
  • Gold +18.90 @ 1849.50
  • Silver +0.41 @ 24.72
  • Copper -0.06 @ 4.31
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