Morning Notes – Monday, September 19, 2022

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM; rising since 6:15 PM; up more than 18 points from the low of 3846.25
  • The odds are for a down to sideways day with elevated volatility; good chance of a sideways to up move from the pre-open levels around 3965.00  – watch for a break above 3869.50 and 3885.00
  • The key economic data report due during the day:
    • NAHB Housing Market Index ( 47 est.; prev. 49) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3838.23, 3818.63, and 3801.10
  • Critical resistance levels for S&P 500 are 3857.57, 3877.82, and 3888.28
  • Key levels for E-mini futures: break above 3869.50, the high of 4:15 AM and a break below 3851.50, the low of 7:45 AM


  • On Friday at 4:00 PM, S&P futures (December 2022) closed at 3888.75, and the index closed at 3873.33 – a spread of about +15.50 points; the futures closed at 3890.00; the fair value is -1.25
  • Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -25.00, Dow by -216, and NASDAQ by -74.25

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai was up; Tokyo was closed
  • European markets are lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are mixed
    • Industrial metals are higher
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.448%, up +25.5 basis points from two weeks ago;
    • The 30-year is at 3.519%, up +17.5 basis points;
    • The 2-year yield is at 3.868%, up +46.6 basis points;
    • The 10-Year-&-2-Year spread is at -0.420, down from -0.209
    • The 30-Year-&-10-Year spread is at 0.071, down from 0.151
  • VIX
    • At 27.61 @ 8:45 AM; up from the last close; above the 5-day SMA;
    • Recent high = 29.06 on July 13; low = 21.67 on August 26
    • Sentiment: Risk-Off

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

  • The week ending on September 16 was a Bearish Engulfing candle with small upper and lower shadows;
    • Stochastic (9,1, 3): %K crossed below %D; near ten
    • RSI-9 is just above 40
  • The week was down -282.20 or -4.8%; the 5-week ATR  is 181.0
  • A down week; fourth in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=3943.23, R1=4049.38, R2=4225.43; S1=3767.18, S2=3661.03; S1 pivot level was breached
  • Below 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
  • A Hammer Doji that gapped down at the open below and broke below an uptrend line from June 16 lows
    • Stochastic (9, 1, 3): %K is below %D; turning up from below ten
    • RSI-9 is near 30; below 8-day EMA;
  • Below 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Trending down with lower lows and lower highs
  • RSI-21 is rising; above 40 after making a Bullish Divergence and 6:00 AM
    • Below EMA20, which is Below EMA10 of EMA50
  • Bias: Down
30-Minute (E-mini futures)
  • Declining since 4:30 PM on Friday; near the lows of a trading range between 3903.00 and 3845.00;
  • Broke below a pennant on Tuesday – the 61.8% extension target is near 3830.00, the 100% extension target is near 3741.00, and the 161.8% extension target is near 3594.84
    • RSI-21 is around 45
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 11:30 PM
  • The Bollinger Band is relatively expanded
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Friday, September 16, in higher volume. The major indices gapped down at the open and made ay’s lows n the morning trading. They moved sideways until the late afternoon, when they recovered some of the losses.

For the week, the major US indices closed lower in higher volume. Most exchanges closed lower in Asia and Europe. The dollar index was up, energy futures were down, and the metals and soft commodities were mixed. The US Treasury yields closed up.



The major indices all closed near session highs, but failed to climb out of negative territory. This marks the fourth losing week out of the last five weeks.

The S&P 500 closed down 2.1% on the week; the Nasdaq Composite closed down 5.5% on the week; the Dow Jones Industrial Average closed down 2.2% on the week.


Nine of the 11 S&P 500 sectors closed in the red, only consumer staples (+0.3%) and real estate (+0.03%) could squeeze out a gain. There was a risk-off mentality as the defensive-oriented health care (-0.3%) and utilities (-0.4%) sectors closed with some of the slimmest losses. On the flip side, energy (-2.2%) and industrials (-2.1%) sank to the bottom of the pack.


WTI crude oil futures rose 0.3% to $85.40/bbl while natural gas futures fell 6.2% to $7.80/mmbtu.


The 2-yr note yield fell two basis points today, but rose 28 basis points on the week to 3.85%. The 10-yr note yield fell one basis point today, but rose 13 basis points on the week to 3.45%.

    • The preliminary September University of Michigan Index of Consumer Sentiment checked in at 59.5 ( consensus 60.0) versus the final reading of 58.2 for August. In the same period a year ago, the Index of Consumer Sentiment stood at 72.8.
    • […]
    • July Net Long-Term TIC Flows was $21.4 billion; prior was $121.8 billion

. Dow Jones Industrial Average: -15.2% YTD
. S&P 400: -16.3% YTD
. S&P 500: -18.7% YTD
. Russell 2000: -19.9% YTD
. Nasdaq Composite: -26.8% YTD

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