Morning Notes – Tuesday, January 23, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 8:45 AM – moving within a trading range between 4898.25 and 4873.50 since 7:45 PM on Sunday.
  • The odds are for a sideways to an up day – watch for a break above 4898.25 or a break below 4873.50 for clarity.
  • The major economic data report due during the day:
    • Richmond Manufacturing Index (-7 est.; prev. -11) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 4844.54, 4829.19, and4798.85.
  • Critical resistance levels for the S&P 500 are 4868.41, 4878.66, and 4888.90.
  • The key levels for E-mini futures are 4898.25, the high at 10:00 AM on Monday, and 4873.50, the low at 1:15 PM on Monday.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (March 2024) closed at 4881.75, and the index closed at 4850.43 – a spread of about +31.25 points; the futures closed at 4881.00; the fair value is -0.75.
  • Pre-NYSE session open, futures were mixed – at 8:15 AM, S&P 500 futures were up by +6.75, Dow down by -27, and NASDAQ up by +42.75.

Markets Around the World

  • Markets in the East mostly closed mixed – Shanghai, Hong Kong, Sydney, and Seoul closed up; Tokyo; Mumbai, and Singapore closed lower.
  • European markets are mostly lower – Germany and the UK are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are lower.
    • Industrial metals are lower.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.128, up +12.6 basis points from two weeks ago.
    • The 30-year is at 4.350%, up +17.7 basis points.
    • The 2-year yield is at 4.381%, down -0.2 basis points.
    • The 10-Year-&-2-Year spread is at -0.253, up from -0.381
    • The 30-Year-&-10-Year spread is at 0.222, up from +0.171
  • VIX
    • At 13.20 @ 8:00 AM; up from the last close; below the 5-day SMA
    • Recent high = 15.40 on December 17; low = 12.35 on January 11; Sentiment: Risk-Neutral

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

Weekly:
  • The week ending on January 19 was a green candle closing at the all-time high.
  • 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 the %D.
    • RSI-9 is above 70.
  • The week was up +55.98 or +1.2%; the 5-week ATR is 88.33.
  • Fourth up week in the last five weeks and ninth in the previous ten weeks
  • The weekly pivot point=4798.90, R1=4882.98, R2=4926.15; S1=4755.73, S2=4671.65; R1/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small red candle that looks like a Gravestone Doji.
  • Above a Horizontal Channel between 4802.40 and 4682.11, forming since December 14, 2023 – the 61.8% extension target is near 4876.00, the 100% extension target is near 4922.00, and the 161.8% extension target is near 4997.00.¬†
    • Stochastic (9, 1, 3): %K crossed below %D.
    • RSI-9 is above70; above 8-day EMA.
  • Above 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA – in sequence.
  • Uptrend
2-Hour (E-mini futures)
  • Moving sideways¬†around 4885.00 since 6:00 PM on January 21. Above a Horizontal Trading Channel between 4841.25 and 4702.00 – the 61.8% extension target near 4927.00, the 100% extension target near 4981.00, and the 161.8% extension target near 5067.00.
    • RSI-21 has declined to around 65 from above 85 and after making a Bearish Divergence at 8:00 AM on Monday.
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Drifting sideways since 7:30 PM on Sunday around between 4898.00 and 4873.00.
    • RSI-21 has been moving around just above 50.
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways since 9:15 PM on Sunday.
  • The Bollinger Band is relatively narrow.
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Monday, January 22 in lower volume. Dow Jones Industrial Average, S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market Index closed at all-time highs.

The major indices opened higher up but gave up most of the gains soon and then mostly traded sideways for the rest of the day.

All but three S&P sectors – Consumer Discretionary, Consumer Staples, and Utilities – closed higher. The dollar index closed up, the energy futures were mixed, the metals were down, and most soft commodities closed up. The US Treasury Yields ended lower.

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