Morning Notes – Friday, January 26, 2024

Directional Bias for the Day:

  • S&P Futures are a little higher at 8:45 AM – up more than 25 points since 2:45 AM low of 4899.50 after turning around following the PCE report at 8:30 M.
  • The odds are for an up day – watch for a break below 4911.75 and a break below 4889.00 for a change of sentiments.
  • The major economic data report due during the day:
    • Core PCE (0.2% vs. 0.2% est.; prev. 0.1%) at 8:30 AM.
    • Personal Income (0.3% vs. 0.3% est.; prev. 0.4%) at 8:30 AM.
    • Personal Spending (0.7% vs. 0.5% est.; prev. 0.4%) at 8:30 AM.
    • Pending Home Sales (2.1% est.; prev. 0.0%) at 10:00 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for the S&P 500 are 4878.52, 4869.34, and 4865.94.
  • Critical resistance levels for the S&P 500 are 4898.15, 4903.68, and 4916.03.
  • The key levels for E-mini futures are 4933.25, the high at 12:30 PM on January 24, and 4911.75, the low at 8:30 AM.

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (March 2024) closed at 4924.00, and the index closed at 4894.16 – a spread of about +29.75 points; the futures closed at 4923.25; the fair value is +0.75.
  • Pre-NYSE session open, futures were mixed – at 8:45 AM, the S&P 500 futures were up by +3.50, Dow up by +3, and NASDAQ down by -30.50.

Markets Around the World

  • Markets in the East closed mixed – Hong Kong and Tokyo closed down; Syndey and Mumbai were closed for trading.
  • European markets are lower.
  • 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 mostly higher.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.118, up +14.1 basis points from two weeks ago.
    • The 30-year is at 4.370%, up +18.8 basis points.
    • The 2-year yield is at 4.304%, up +4.6 basis points.
    • The 10-Year-&-2-Year spread is at -0.186, up from -0.281
    • The 30-Year-&-10-Year spread is at 0.252, up from +0.205
  • VIX
    • At 13.73 @ 8:30 AM; up from the last close; above the 5-day SMA
    • Recent high = 15.40 on December 17; low = 12.35 on January 11; Sentiment: Risk-Off

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 Doji with a larger lower shadow.
  • 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 above %D above 90.
    • RSI-9 is above75; 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 within a trading range between 4933.25 and 4889.00 since 6:00 Pm on January 23.
  • 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 is just below 60.
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • At the upper bound of a symmetrical triangle near all-time highs.
    • RSI-21 has risen to just below 60 from near 40.
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 4:15 AM.
  • The Bollinger Band has been expanding since 4:15 AM with the price near the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Thursday, January 25 in mixed volume. Dow Jones Transportation Average and Dow Jones Industrial Average traded in higher volume. The major indices opened higher and after a brief move up declined until mid-afternoon before rising again for the final couple of hours of trading.

All but two S&P sectors – Consumer Discretionary and Healthcare – closed higher. The dollar index closed up, the energy futures closed mixed, precious metals closed higher, the industrial metals were mixed, and most soft commodities closed down. Bonds rose and the US Treasury Yields closed down.

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