Morning Notes – Tuesday, June 20, 2023

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM. The futures have been moving within a down-sloping flag since 2:45 PM on Friday
  • The odds are for a down day – watch for a break below 4447.75 for a change of sentiments
  • The major economic data report due during the day:
    • Building Permits ( 1.49M vs. 1.42M est.; prev. 1.42M) at 8:30 AM
    • Housing Starts ( 1.63M vs. 1.40M est.; prev. 1.34M ) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4391.82, 4385.07, and 4362.60
  • Critical resistance levels for S&P 500 are 4407.44, 4427.43, and 4448.47
  • The key levels for E-mini futures are 4447.75, the high at 4:00 AM, and 4433.50, the low at 4:45 AM


  • On Friday at 4:00 PM, S&P futures (September 2023) closed at 4455.75, and the index closed at 4409.59 – a spread of about +46.25 points; the futures closed at 4453.75; the fair value is +2.00
  • Pre-NYSE session open, futures were lower – at 9:00 AM, S&P 500 futures were down by -10.25, Dow by -101, and NASDAQ by -26.75

Markets Around The World

  • Markets in the East closed mixed
  • European markets are mostly lower
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • 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)
    • The 10-year yield closed at 3.765, up +7.2 basis points from two weeks ago;
    • The 30-year is at 3.853%, down -3.7 basis points;
    • The 2-year yield is at 4.720%, up +26.2 basis points;
    • The 10-Year-&-2-Year spread is at -0.955, down from -0.765
    • The 30-Year-&-10-Year spread is at 0.088, down from +0.197
  • VIX
    • At 14.48 @ 7:00 AM; up from the last close; above the 5-day SMA;
    • Recent high = 20.81 on May 24; low = 13.48 on June 16
    • Sentiment: Risk-Off

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

  • The week ending on June 16 was a green candle with almost no lower shadow and a small upper shadow, which has moved up after breaking above a symmetrical triangle – the 61.8% extension target is near 4625.00 and the 100% extension target is near 4950.00
    • Stochastic (9,1, 3): %K is just below the %D and is near 90
    • RSI-9 is just above 70
  • The week was up +110.73 or +2.3%; the 5-week ATR  is 149.52
  • An up week, fifth in the last five weeks, and seventh in the previous ten weeks;
  • The weekly pivot point=4387.48, R1=4470.58, R2=4531.58; S1=4326.48, S2=4243.38; R1/R2/R3 pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
  • A red candle with a small upper shadow and almost no lower shadow; a potential three-day evening star.
    • Stochastic (9, 1, 3): %K is below %D
    • RSI-9 is just below 80; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Trending sideways to lower since 12:00 PM on June 15 within an uptrend since May 24, making higher highs and higher lows;
    • RSI-21 is around 40; made Bearish Divergences on Thursday and Friday
    • At/below EMA20, which is at/above EMA10 of EMA50,
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Drifting lower since 9:00 AM on Friday
    • RSI-21 has been moving around 40
    • Below EMA 20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving down since 3:30 PM on Monday
  • The Bollinger Band has been expanding since 4:00 AM, with the price first talking down the lowe band and then bouncing up to the upper band
  • Bias: Down

Previous Session

Major U.S. indices closed lower on Friday, June 16, in higher volume. Dow Jones Transportation Average and Russell 2000 traded in lower volume. The indices opened flat and then sideways until the afternoon when they turned down and closed near the lows for the day.

All but three S&P sectors – Consumer Staples, Materials, and Utilities – closed higher.



The stock market closed out this quarterly options expiration day on a downbeat note, but losses were still relatively slim when considering the big move up recently. The major indices spent most of the session oscillating around their flat lines before finding some downside momentum in the afternoon trade. Ultimately, they settled near their lows of the day.


The 2-yr note yield rose seven basis points to 4.71%. The 10-yr note yield rose four basis points to 3.77%. The move up in yields acted as a headwind for mega caps and other growth stocks.


Decliners led advancers by a roughly 5-to-3 margin at both the NYSE and at the Nasdaq.


Only three of the 11 S&P 500 sectors logged gains. Utilities (+0.5%), materials (+0.1%), and consumer staples (+0.1%) led the pack. Meanwhile, lagging mega cap components drove the communication services (-1.0%) and information technology (-0.8%) sectors to the bottom of the pack.

  • Nasdaq Composite: +30.8% YTD
  • S&P 500: +14.9% YTD
  • Russell 2000: +6.5% YTD
  • S&P Midcap 400: +6.2% YTD
  • Dow Jones Industrial Average: +3.5% YTD

Today’s economic data was limited to the preliminary University of Michigan Consumer Sentiment Index for June, which checked in at 63.9 ( consensus 60.2) versus the final reading of 59.2 for May. In the same period a year ago, the index stood at 50.0.

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