Morning Notes – Monday, August 28, 2023

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moving up since 6:15 AM after a sideways consolidation since 6:00 PM on Sunday; up more than 20 pints from the European session open;
  • The odds are for an up day with elevated volatility – watch for a break below 4410.75 for a change in sentiments
  • No major economic data report is due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4418.46, 4401.67, and 4380.12
  • Critical resistance levels for S&P 500 are 4428.86, 4441.23, and 4458.30
  • The key levels for E-mini futures are 4442.25, the low at 3:00 PM on August 23, and 4410.75, the low at 3:45 PM on Friday


  • On Friday at 4:00 PM, S&P futures (September 2023) closed at 4415.00, and the index closed at 4405.71 – a spread of about +9.25 points; the futures closed at 4414.25; the fair value is +0.75
  • Pre-NYSE session open, futures were higher – at 9:00 AM, S&P 500 futures were up by +22:75, Dow by +165, and NASDAQ by +114.25

Markets Around The World

  • Markets in the East closed higher
  • European markets are 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 mostly higher
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.202, up +3.4 basis points from two weeks ago;
    • The 30-year is at 4.259%, down -1.3 basis points
    • The 2-year yield is at 5.084%, up +19.1 basis points;
    • The 10-Year-&-2-Year spread is at -0.882, down from -0.725
    • The 30-Year-&-10-Year spread is at 0.057, down from +0.104
  • VIX
    • At 15.84 @ 8:45 AM; up from the last close; below the 5-day SMA;
    • Recent high = 18.88 on August 18; low = 14.60 on August 10
    • Sentiment: Risk-On

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

  • The week ending on August 25 was a small green Haram with an upper shadow longer than the lower shadow and the real body.
    • Stochastic (9,1, 3): %K turned up below the %D;
    • RSI-9 turned up above 50
  • The week was up +36.00 or +0.8%; the 5-week ATRĀ  is 107.72
  • Second up week in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=4406.77, R1=4457.24, R2=4508.78; S1=4355.23, S2=4304.76; No pivot levels were breached
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
  • A green Haramin spinning top candle within a relatively large Bearish Engulfing candle. A Head-and-Shoulder pattern continues to take shape and a break below 4335.00 will complete the pattern with the 61.8% extension target near 4170.00 and the 100% extension target near 4060.00

    • Stochastic (9, 1, 3): %K crossed above the %D;
    • RSI-9 turned up to around 45 from below 40; above 8-DMA
  • Below 20-day EMA and 50-day EMA; above 100-day SMA, and 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Broke above the downtrend line from the July high for the second time
    • RSI-21 has risen to above 65 from around 25 and after making Bullish Divergence
    • Above EMA20, which is at/below EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving up since 10:30 AM on Friday – up more than 70 points
    • RSI-21 is moving above 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 7:45 AM.
  • The Bollinger Band has been expanding since 7:45 AM with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Friday, August 25, in mixed volume. The Dow Jones Transportation Average closed down in lower volume. Dow Jones Industrial Average also traded in lower volume. The major indices moved first higher, then declined to make the day’s lows by mid-day, and then traded higher for the rest of the day. Most made Harami spinning top candles.

For the week the major indices closed mixed in mostly lower volume. The markets in Asia closed mixed but most European markets closed higher. The dollar index closed up, the energy futures closed down, precious metals closed up, and the industrial metals and soft commodities closed mostly higher. The US Treasury Yields closed down.

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