Morning Notes – Wednesday, January 10, 2024

Directional Bias for the Day:

  • S&P Futures are a bit lower at 8:45 AM – drifting down since 4:30 AM – down by 15 points from a high of 4804.00.
  • The odds are for a sideways day – watch for a break above 4804.00 or a break below 4786.00 for clarity.
  • The major economic data reports that are due during the day.
    • Final Wholesale Inventories (-0.2% est.; prev. -0.2%) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Down-Side

Key Levels:

  • Critical support levels for the S&P 500 are 4746.93, 4730.35, and 4717.85.
  • Critical resistance levels for the S&P 500 are 4765.47, 4776.90, and 4793.18.
  • The key levels for E-mini futures are 4804.00, the high at 4:30 AM, and 4786.00, the low at 1:45 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2024) closed at 4793.00, and the index closed at 4756.50 – a spread of about +36.50 points; the futures closed at 4792.75; the fair value is +0.25
  • Pre-NYSE session open, futures were lower – at 8:45 AM, S&P 500 futures were down by -1.25, Dow by -4, and NASDAQ by -8.00

Markets Around the World

  • Markets in the East mostly closed lower – Tokyo and Mumbai closed up.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CAD
  • EUR/USD
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are lower.
    • Industrial metals are lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.019, up +13.3 basis points from two weeks ago.
    • The 30-year is at 4.185%, up +14.2 basis points.
    • The 2-year yield is at 4.366%, up +0.1 basis points.
    • The 10-Year-&-2-Year spread is at -0.347, up from -0.479
    • The 30-Year-&-10-Year spread is at 0.166, up from +0.157
  • VIX
    • At 12.87 @ 8:00 AM; up from the last close; below the 5-day SMA
    • Recent high = 14.49 on December 21; low = 12.38 on December 28; Sentiment: Risk-Neutral

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

Weekly:
  • 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
Daily
  • A small green Harami candle that made new intra-day high for the year but closed below last close.
  • 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 is above %.
    • RSI-9 is around 60; above 8-day EMA.
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend
2-Hour (E-mini futures)
  • Moving sideways near the middle of a Horizontal Trading Channel after breaking below it on January 4 and then bouncing back up into in on January 8.
    • RSI-21 is around 55.
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Drifting sideways since 12:00 PM on Tuesday within 4804.00 and 4783.00.
    • RSI-21 has been moving around 50.
    • At/below EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways since 4:45 AM.
  • The Bollinger Band has been contracting since 7:00 AM after expanding from 4:45 AM.
  • Bias: Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, January 9 in lower volume. NASDAQ Composite was the only major index that gained.

The Major indices gapped down at the open but then started to rise and got into the positive territory in afternoon before losing some of that advance. All but two S&P sectors РConsumer Staples and Technology Рclosed lower. The dollar index closed up, the energy futures climbed higher, the metals Рprecious and industrials Рdeclined, and most of the soft commodities rose. The US Treasury Yields inched up.

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