Morning Notes – Monday, September 26, 2022

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM; bouncing up since 5:30 AM from a low of 3671.50
  • The odds are for a down to sideways day with elevated volatility – watch for a break above 3702.25 and 3718.25
  • No key economic data report is due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3676.05, 3662.87, and 3647.47
  • Critical resistance levels for S&P 500 are 3701.87, 3727.14, and 3749.45
  • Key levels for E-mini futures: break above 3761.75, the high of 4:00 AM and a break below 3715.25, the low of 8:45 AM


  • On Friday at 4:00 PM, S&P futures (December 2022) closed at 3707.50, and the index closed at 3693.23 – a spread of about +14.25 points; the futures closed at 3709.00; the fair value is -1.50
  • Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -16.50, Dow by -86, and NASDAQ by -10.75

Markets Around The World

  • Markets in the East closed lower – Tokyo was closed
  • European markets are mostly lower – Itlay is higher
  • 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 lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.697%, up +37.6 basis points from two weeks ago;
    • The 30-year is at 3.612%, up +15.6 basis points;
    • The 2-year yield is at 4.211%, up +65.0 basis points;
    • The 10-Year-&-2-Year spread is at -0.514, down from -0.240
    • The 30-Year-&-10-Year spread is at -0.085, down from 0.135
  • VIX
    • At 31.86 @ 9:00 AM; up from the last close; above the 5-day SMA;
    • Recent high = 35.05 on June 13; low = 22.64 on September 9
    • Sentiment: Risk-Off

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

  • The week ending on September 23 was a large red candle with small upper ad lower shadows
    • Stochastic (9,1, 3): %K is below %D; below ten
    • RSI-9 is just above 30
  • The week was down -180.15 or -4.7%; the 5-week ATR  is 212.40
  • A down week; fourth in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=3749.24, R1=3851.01, R2=4008.84; S1=3591.41, S2=3489.64; S1/S2 pivot levels were breached
  • Below 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
  • A red Hammer candle that is bouncing off a support level around 3636.87; completed an ABCD pattern – the 100% extension target near 3680.00 is achieved; the 161.8% extension target is near 3400.00
    • Stochastic (9, 1, 3): %K crossed above %D from below  five
    • RSI-9 is below 25; 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; moving sideways since 6:00 AM on September 23
  • RSI-21 is rising since 10:00 AM on September 23; near 50 from near 15
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (E-mini futures)
  • Trending down; moving sideways since 11:00 AM on September 23 around 3700.00
    • RSI-21 is trending up since 6:30 AM on Friday; Bullish Divergence at 2:30 PM
    • At/below EMA10 of EMA50 but above EMA20
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 3:00 PM on Friday
  • The Bollinger Band is expanded with price moving up from the lower band to the upper band
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Friday, September 23, in mixed volume. Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume. The major indices gapped down at the open and then declined more, They turned around at 3:00 PM and recouped some of the losses.

For the week, the major US closed down sharply in mixed volume. The markets in Asia and Europe also closed down. The dollar index was up, and most commodities closed down. The US Treasury Yields moved higher. All S&P sectors closed down for the week.



The S&P 500 and Dow Jones Industrial Average both fell below their June 16th closing lows (3,666.77 and 29,688.78, respectively) and the DJIA broke below its intraday low (29,653.29) from the same day. The DJIA closed below the June low while the S&P 500 was able to climb above its June low by the close.


The 2-yr note yield rose as high as 4.26% (it began the week at 3.85%) and the 10-yr note yield went as high as 3.82% (it began the week at 3.45%). They settled at 4.21% and 3.70%, respectively.


Decliners led advancers by a 7-to-1 margin at the NYSE and a 3-to-1 margin at the Nasdaq.


The Russell 2000 closed down 2.5% and the S&P Mid Cap 400 closed down 2.1%.

All 11 S&P 500 sectors logged losses that ranged from 0.5% (health care) to 6.8% (energy).


Today’s economic data was limited to the preliminary September IHS Markit Manufacturing PMI reading, which came in at 51.8 (prior 51.5), and IHS Markit Services PMI reading, which was 43.7 (prior 43.7).

Dow Jones Industrial Average: -18.6% YTD
S&P Midcap 400: -21.21% YTD
S&P 500: -22.5% YTD
Russell 2000: -25.2% YTD
Nasdaq Composite: -30.5% YTD

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