Morning Notes – Monday, December 13, 2021

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; drifted down from 4722.25 at 6:00 AM to near 4708.00; sharp rise following CPI report at 8:30 AM
  • The odds are for a down day – watch for a break above 4713.25 for a change of sentiments
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4713.57, 4699.05, and 4684.37
  • Critical resistance levels for S&P 500 are 4726.98, 4731.99 and 4743.83
  • Key levels for E-mini futures: break above 4713.25, the high of 8:30 AM and break below 4700.75, the low of 4:00 PM on Friday


  • On Friday at 4:00 PM, S&P futures (March 2022) closed at 4703.50 and the index closed at 4712.02 – a spread of about -8.50 points; futures closed at 4703.50 for the day; the fair value is 0.0
  • Pre-NYSE session open, futures are mixed – at 8:45 AM, S&P 500 futures were up by +7.25; Dow down by -6; and NASDAQ up by +59.25

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo, and Sydney closed up; Hong Kong, Mumbai, Seoul, and Singapore closed lower
  • European markets are mostly higher – the UK is lower
  • Currencies (Compared to two weeks ago):
    Up Down
    • USD/JPY
    • AUD/USD
    • INR/USD
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • NZD/USD
    • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.467%, down -1.5 basis points from two weeks ago;
    • 30-years is at 1.850%, up +2.3 basis points;
    • 2-years yield is at 0.657%, up +15.3 basis points;
    • The 10-Year-&-2-Year spread is at 0.806, down from 0.978
    • The 30-Year-&-10-Year spread is at 0.385, down from 0.345
  • VIX
    • At 19.12 @ 8:30 AM; up from the last close; below 5-day SMA;
    • Recent high = 35.32 on December 3; low =  16.03 on November 16
    • Sentiment: Risk-Neutral-On

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

  • November 2021 was a Shooting Star candle at all-time highs; watch for a close below November’s lows;
    • Stochastic (9, 1, 3): %K crossed below %D; from near 100; %D Bearish Divergence
    • RSI-9 is turning down from above 75; Bearish Divergence
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
  • The week ending on December 10 was a relatively large green candle
    • Stochastic (9,1, 3): %K crossed above %D; above 90
    • RSI-9 turned up from near 50; above 65
  • The week was up +173.59 or +3.8%; the 5-week ATR  is 128.08
  • An up week; second in the last five weeks, and seventh in the previous ten weeks
  • The weekly pivot point=4655.37, R1=4770.22, R2=4828.43; S1=4597.16, S2=4482.31; R1 pivot level was breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Under Pressure
  • A green candle with almost no upper shadow and small lower shadow near all-time highs
    • Stochastic (9, 1, 3): %K crossed above %D; above 90
    • RSI-9 turned up to just below 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Breaking above a resistance level around 4710.00 after a brief retracement on Thursday and Friday
    • RSI-21 declined to just below 65 from above 80 at 10:00 PM on Sunday and after making a Bearish Divergence;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to down since 8:30 PM on Sunday; mostly moving sideways since 4:00 PM on December 7 within a 60 points range
    • RSI-21 is moving above 50
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 10:30 PM
  • The Bollinger Band is expanding slightly since 7:00 AM with price moving along the lower band
    • Stochastic (9, 1, 3): %K crisscrossing %D lower
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, December 10, in mixed volume. Russell 2000 closed lower. Dow Jones Transportation Average and Russell 2000 traded in lower volume. The day’s price range was small. For most of the day, the price moved mostly sideways before advancing near the close.

For the week, major US indices closed higher in lower volume. Markets in Asia and Europe closed higher. Energy futures, precious metals, industrial metals, and soft commodities closed mixed. The US Treasury yields inched higher and all S&P sectors closed up for the week.


The S&P 500 rose 1.0% on Friday, and closed at a record high, following a hot Consumer Price Index (CPI) report for November. The Nasdaq Composite (+0.7%) and Dow Jones Industrial Average (+0.6%) also posted decent gains, and like the S&P 500, ended the week with gains over 3.5%.

All 11 S&P 500 sectors closed higher, with the information technology sector (+2.1%) being the biggest and most influential gainer. The financials sector (+0.1%) underperformed on a relative basis with a 0.1% gain.


Specifying the data, total CPI increased 0.8% m/m in November ( consensus 0.6%), leaving it up 6.8% yr/yr — its highest level since 1982. Core CPI, which excludes food and energy, increased 0.5% m/m, as expected, and was up 4.9% yr/yr.


The 10-yr yield settled unchanged at 1.49% after trading at 1.51% prior to the CPI data. The 2-yr yield decreased two basis points to 0.66%, even though the report not only supported the case for the Fed be more aggressive with its tapering plan but also to think about hiking rates three times next year.

The U.S. Dollar Index decreased 0.2% to 96.06. WTI crude futures rose 1.2%, or $0.83, to $71.70/bbl.

  • The preliminary December University of Michigan Index of Consumer Sentiment increased to 70.4 ( consensus 68.0) from the final November reading of 67.4.
  • The U.S. Treasury reported a $191.3 bln deficit for November to follow last month’s $165.06 bln deficit. The deficit one year ago was $145.27 bln.
  • S&P 500 +25.5% YTD
  • Nasdaq Composite +21.3% YTD
  • Dow Jones Industrial Average +17.5% YTD
  • Russell 2000 +12.0% YTD
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