Market Remarks

Morning Notes – Tuesday, March 21, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 8:45 AM; trending up since 4:15 AM on Monday- up 30 points since 2:00 AM
  • The odds are for an up day with elevated volatility – watch for a break below 3989.75 for a change of sentiments
  • The major economic data report is due during the day:
    • Existing Home Sales ( 4.19M est.; prev. 4.00M) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3969.76, 3956.62, and 3923.38
  • Critical resistance levels for S&P 500 are 4017.81, 4047.00, and 4077.84
  • The key levels for E-mini futures are a break above 4035.00, a high at 12:00 PM on March 9,  and a break below 3989.75, a low at 4:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2023) closed at 3984.50, and the index closed at 3951.57 – a spread of about +33.00 points; the futures closed at 3983.00; the fair value is +1.50
  • Pre-NYSE session open, futures were higher – at 8:30 AM, S&P 500 futures were up by +32.75, Dow by +275, and NASDAQ by +75.75

Markets Around The World

  • Markets in the East closed higher – Tokyo was closed for trading
  • European markets are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.573, down -41.0 basis points from two weeks ago;
    • The 30-year is at 3.724%, down -18.9 basis points;
    • The 2-year yield is at 3.991%, down -91.0 basis points;
    • The 10-Year-&-2-Year spread is at -0.418, up from -0.918
    • The 30-Year-&-10-Year spread is at 0.151, up from -0.070
  • VIX
    • At 22.75 @ 8:15 AM; down from the last close; below the 5-day SMA;
    • Recent high = 30.81 on March 13; low = 18.16 on March 3
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on March 17 was a small green candle that looks like an In-NEck candlestick pattern, which is a continuation pattern
    • Stochastic (9,1, 3): %K crossed above the %D;
    • RSI-9 is just below 55
  • The week was up +55.05 or +1.4%; the 5-week ATR  is 151.15
  • An up week, second in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=3896.65, R1=3984.45, R2=4052.25; S1=3828.85, S2=3741.05; No pivot levels were breached
  • Below 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A relatively small green Harami candle that closed near the previous day’s high
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 is near 50; above 8-DMA
  • Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Within an up-sloping flag since 2:00 PM on March 9 – near the upper bound
    • RSI-21 is above 70 after making a bullish Hidden Divergence at 2:00 AM on Monday
    • Above EMA20, which is above EMA10 of EMA50
  • Bias:  Side-Up
30-Minute (E-mini futures)
  • Broke above a Double Bottom – the 61.8% extension target is near 4080.00, and the 100% extension target is near 4125.00
    • RSI-21 is moving above 65
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 6:00 AM on Monday.
  • The Bollinger Band has been expanding since 3:30 AM, with the price walking up the upper band
  • Bias: Up

Previous Session

Major U.S. indices closed higher on Monday, March 20, in lower volume. The major indices opened up and then drifted higher for the rest of the day. All S&P sectors closed up.

From Briefing.com:

[…]

Mega cap stocks, which enjoyed a leadership role last week, were relative underperformers today

[…]

The Vanguard Mega Cap Growth ETF (MGK) was up a modest 0.2% versus the Invesco S&P 500 Equal Weight ETF (RSP), which rose 1.3%. The market-cap weighted S&P 500 advanced 0.9%, pushing above its 200-day moving average (3,935), which pivoted from resistance to support.

[…]

The Russell 2000 rose 1.1% and the S&P Mid Cap 400 rose 1.7%.

All 11 S&P 500 sectors closed with gains ranging from 0.2% (information technology) to 2.1% (energy).

The 2-yr note yield rose 10 basis points today to 3.92% and the 10-yr note yield rose nine basis points to 3.48%, as market participants anxiously await the FOMC decision on March 22.

  • Nasdaq Composite: +11.6% YTD
  • S&P 500: +2.9% YTD
  • S&P Midcap 400: -0.7% YTD
  • Russell 2000: -0.9% YTD
  • Dow Jones Industrial Average: -2.7% YTD
[…]

Overseas: 

  • Europe: DAX +1.1%, FTSE +0.9%, CAC +1.3%
  • Asia: Nikkei -1.4%, Hang Seng -0.5%, Shanghai -2.7%

Commodities: 

  • Crude Oil +0.80 @ 67.67
  • Nat Gas -0.10 @ 2.36
  • Gold +7.70 @ 1983.10
  • Silver +0.15 @ 22.65
  • Copper +0.06 @ 3.96
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