Morning Notes – Monday, March 21, 2022

Directional Bias For The Day:

  • S&P Futures are a bit lower before the NYSE open; drifting higher since 1:30 AM
  • The odds are for a sideways to an up day – watch for a break above 4465.75 and a break below 4430.75 for clarity
  • Key economic data report due during the day:
    • Fed Chair Powell speech at 12:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4433.36, 4409.59, and 4402.53
  • Critical resistance levels for S&P 500 are 4465.40, 4489.55, and 4500.39
  • Key levels for E-mini futures: break above 4465.75, the high of 4:30 PM on Friday and break below 4430.75, the low of 1:30 AM


  • On Friday at 4:00 PM, S&P futures (June 2022) closed at 4452.75 and the index closed at 4463.12 – a spread of about -10.50 points; futures closed at 4453.50 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -0.25; Dow by -46; and NASDAQ by -41.75

Markets Around The World

  • Markets in the East closed mostly lower  – Shanghai and Singapore closed higher; Tokyo was closed;
  • European markets are mixed – Germany, the UK, France, and STOXX 600 are lower; Spain, Italy, and Switzerland are up
  • Currencies (Compared to two weeks ago):
    Up Down
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.232%, up +50.8 basis points from two weeks ago;
    • 30-years is at 2.483%, up +33.2 basis points;
    • 2-years yield is at 1.944%, up +45.6 basis points;
    • The 10-Year-&-2-Year spread is at 0.288, up from 0.236
    • The 30-Year-&-10-Year spread is at 0.251, down from 0.427
  • VIX
    • At 24.59 @ 8:30 AM; up from the last close; below the 5-day SMA;
    • Recent high = 37.52 on March 8; low = 23.88 on February 16
    • Sentiment: Risk-Off-Neutral

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

  • December 2021 was a green candle that opened above the previous week’s real-body and closed higher with a small upper shadow and a slightly longer lower shadow; at all-time highs
    • Stochastic (9, 1, 3): %K crossed above %D; above 90;
    • RSI-9 is turning up from above 75;
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
  • The week ending on March 18 was a large Bullish Engulfing candle with almost no upper shadow and a small lower shadow;
    • Stochastic (9,1, 3): %K crossed above %D from below 30;
    • RSI-9 bounced up above 50 from just above 30
  • The week up +258.81 or +6.2%; the 5-week ATR  is 208.99
  • An up week; second in the last five weeks, and fourth in the previous ten weeks
  • The weekly pivot point=4363.41, R1=4565.11, R2=4667.09; S1=4261.43, S2=4059.73; R1/R2 pivot levels were breached
  • Above 10-week EMA; below 39-week SMA; above 89-week SMA
  • Uptrend
  • A green candle with a small lower shadow and almost no upper shadow; above a downtrend line from the all-time highs; the sequence of lower lows and lower highs is broken;
    • Stochastic (9, 1, 3): %K crossing below %D; both near 100
    • RSI-9 is above 60 and trending up; above 8-day EMA;
  • Above 20-day EMA and 50-day EMA; below 100-day SMA; at/below 200-day SMA
  • In Confirmed Uptrend
2-Hour (E-mini futures)
  • Trending higher since 4:00 AM on March 15 after making a Double Bottom – the 61.8% extension target near 4445.00 is achieved and the 100% extension target is near 4515.00;
    • RSI-21 declining since 4:00 PM on Friday after making a Bearish Divergence
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to up since 3:30 PM in a saucer pattern;
    • RSI-21 declined from near 80; moving between 50 and 60
    • At/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 to up since 12:15 AM
  • The Bollinger Band is relatively stable and narrow bounced up to the middle band
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower;
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, March 18, in higher volume. Major indices opened up and then mostly traded higher for the rest of the day.

For the week, the major US indices closed higher in mostly lower volume. NASDAQ Composite traded in lower volume. The markets in Asia and Europe closed higher. The dollar index was down, energy and precious metals were mixed and most other hard and soft commodities were down for the week. The US Treasury yields inched up. All but one S&P sector – Energy – closed higher.


The S&P 500 rose 1.2% on this quadruple witching-options expiration Friday, as the mega-caps carried the benchmark index to its fourth straight advance. The Nasdaq Composite gained 2.1%, the Dow Jones Industrial Average gained 0.8%, and the Russell 2000 gained 1.0%.


The mega-caps were steady leaders throughout the session, lifting the S&P 500 information technology (+2.2%), consumer discretionary (+2.2%), and communication services (+1.4%) sectors to the top of the standings. No other sectors gained at least 1.0%.


The U.S. Dollar Index increased 0.2% to 98.21. WTI crude futures fell 0.4%, or $0.40, to $103.03/bbl. The CBOE Volatility Index fell 7.0% to 23.87.

  • Existing home sales decreased 7.2% in February to a seasonally adjusted annual rate of 6.02 million ( consensus 6.20 million). Total sales in February were down 2.4% from a year ago.
  • […]
  • The Conference Board’s Leading Economic Index increased 0.3% m/m in February following a revised 0.5% decline (from -0.3%) in January.
  • Dow Jones Industrial Average -4.4% YTD
  • S&P 500 -6.6% YTD
  • Russell 2000 -7.1% YTD
  • Nasdaq Composite -11.2% YTD
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