Morning Notes – Monday, January 8, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM – moving up since 4:30 AM – up more than 25 points from a low of 4715.25.
  • The odds are for an up day – watch for a break below 4729.25 for a change of sentiments.
  • No major economic data report is due during the day.
  • Weekly: Up
  • Daily: Uptrend Under Pressure
  • 120-Min: Down-Side
  • 30-Min: Down-Side
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for the S&P 500 are 4682.11, 4643.26, and 4593.39.
  • Critical resistance levels for the S&P 500 are 4706.42, 4721.46, and 4729.29.
  • The key levels for E-mini futures are 4743.25, the high at 8:15 PM, and 4729.25, the low at 7:45 AM.


  • On Friday at 4:00 PM, S&P futures (March 2024) closed at 4735.50, and the index closed at 4697.24 – a spread of about +38.25 points; the futures closed at 4734.75; the fair value is +0.75
  • Pre-NYSE session open, futures were mixed- at 8:30 AM, S&P 500 futures were up by +2.50, Dow down by -116, and NASDAQ up by +32.25

Markets Around the World

  • Markets in the East mostly closed mostly lower – Singapore closed up and Tokyo was closed for trading.
  • European markets are mostly higher – the US and France are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher.
    • Precious metals are lower.
    • Industrial metals are lower.
    • Soft commodities are mostly lower.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.042, up +14.1 basis points from two weeks ago.
    • The 30-year is at 4.210%, up +15.6 basis points.
    • The 2-year yield is at 4.333%, down -0.3 basis points.
    • The 10-Year-&-2-Year spread is at -0.291, up from -0.435
    • The 30-Year-&-10-Year spread is at 0.168, up from +0.153
  • VIX
    • At 13.78 @ 8:30 AM; up from the last close; above the 5-day SMA
    • Recent high = 14.49 on December 21; low = 12.38 on December 28; Sentiment: Risk-On

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

  • The week ending on January 5 was a red candle with almost no upper shadow and a small lower shadow. A Bearish three-week Evening Star pattern has formed.
    • Stochastic (9,1, 3): %K is below the %D.
    • RSI-9 has declined to 65 from above 75.
  • The week was down -72.59 or -1.5%; the 5-week ATR is 83.43
  • First down week in the last five weeks and first in the previous ten weeks
  • The weekly pivot point=4711.23, R1=4740.34, R2=4783.45; S1=4668.12, S2=4639.01; S1/S2/S3 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
  • A small green candle with a longer upper than the lower shadows. Not much change over the past two days.
  • Broke above a down-sloping Flag on November 14 – the 61.8% extension target 4597.07 is achieved, the 100% extension target is around 4901.99, and the 161.8% extension target is near 5395.00.
    • Stochastic (9, 1, 3): %K crossed above below %D from below ten.
    • RSI-9 turned up below 50; below 8-day EMA;
  • Below 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Drifting sideways around 4730.00 since 10:00 AM on January 4 just below the lower bound -around 4743.25 – of a horizontal trading range – the 61.8% extension target around 4683.00 and the 100% extension target around 4645.00.
    • RSI-21 has bounced up to 50 since making a Bullish Divergence at 6:00 AM on Friday.
    • At/above EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Drifting sideways around 4730.00 since 10:00 AM on January 4 around 4735.00
    • RSI-21 has been moving around 50.
    • Above EMA20, which is at/below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 3:45 AM.
  • The Bollinger Band has been expanding a little since 7:30 AM with the price walking up the upper middle band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Friday, January 5 in mixed volume. Russell 2000 closed lower. in lower volume. Dow Jones Industrial Average also traded in lower volume. The market moved higher at the open, then started to decline in late morning before finding support at mid-December lows and then moved higher for the rest of the day.

For the week, the major indices closed lower and in higher volume. The markets in Asi closed lower but the European markets were mixed. The dollar index and energy futures closed up, the metal futures – precious and industrials – closed down, and so did most of the soft commodity futures. The US Treasury yields inched up. All but four S&P sectors – Energy, Financials, Utilities, and Healthcare – closed lower. Healthcare led all sectors with +2.0% returns and Consumer Discretionary brought up the rear with -3.5% decline.

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