Morning Notes – Thursday, March 14, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. The futures have moved down by more than ten points since 7:00 AM following the release of PPI data.
  • The odds are for a sideways to a down day from pre-open levels around 5240.00 – watch for a break above 5253.50 and a break below 5234.75 for clarity.
  • The major economic data report due during the day:
    • Retail Sales (0.6% vs. 0.8% est.; prev. -1.1%) at 8:30 AM
    • Core Retail Sales (0.3% vs. 0.5% est.; prev. -0.8%) at 8:30 AM.
    • PPI (0.;6% vs. 0.3% est.; prev. 0.3%) at 8:30 AM
    • Core PPI (0.3% vs. 0.2% est.; prev. 0.5%) at 8:30 AM
    • Business Inventories (0.2% est.; prev. 0.4%) at 10:00 AM
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Up-Side
  • 15-Min: Side-Down
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 5151.88, 5143.18, and 5114.48.
  • Critical resistance levels for the S&P 500 are 5172.79, 5189.26, and 5192.70.
  • The key levels for E-mini futures are 5253.50, the high at 7:15 AM, and 5234.75, the low at 8:30 PM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2024) closed at 5233.00, and the index closed at 5165.31 – a spread of about +67.75 points; the futures closed at 5232.50; the fair value is +0.50.
  • Pre-NYSE session open, futures were higher – at 8:30 AM, the S&P 500 futures were up by +14.50, Dow by +162, and NASDAQ by +49.25.

Markets Around the World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Sydney¬†closed down; Tokyo, Mumbai, Seoul, and Singapore closed higher.
  • European markets are mostly higher – the UK and Spain are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mostly higher.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.204, down -7.0 basis points from two weeks ago.
    • The 30-year is at 4.359%, down -5.1 basis points.
    • The 2-year yield is at 4.641%, unchanged.
    • The 10-Year-&-2-Year spread is at -0.437, down from -0.367.
    • The 30-Year-&-10-Year spread is at 0.155, up from +0.136.
  • VIX
    • At 13.46 @ 8:00 AM; below from the last close; below the 5-day SMA
    • Recent high = 16.04 on March 11; low = 13.08 on March 1; Sentiment: Risk-Neutral

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

Weekly:
  • The week ending on March 8 was a small Doji candle at the all-time highs.
  • Broke above a down-sloping Flag on November 14 – the 100% extension target around 4901.00 is achieved, and the 161.8% extension target is near 5395.00.
    • Stochastic (9,1, 3): %K is crossed below the %D from near 100.
    • RSI-9 is above 80.
  • The week was down -13.39 or -0.3%; the 5-week ATR is 124.12.
  • Second down week in the last five weeks and third in the previous ten weeks
  • The weekly pivot point=5123.26, R1=5189.69, R2=5255.70; S1=5057.25, S2=4990.82; R1/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A small red candle with small upper and lower shadows near the close of previous day’s candle.
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 is making a coiling pattern since January; turned down below 60; below 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 higher within an upsloping Linear Regression channel of one StdDev since mid-January – the price is around the middle band of the channel.
    • RSI-21 has risen to above 65 from around 50.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways since 2:30 PM on Tuesday between 5253.50 and 5217.50.
    • RSI-21 is above 55.
    • At/below EMA20, but above EMA10 of EMA50,
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 2:45 AM.
  • The Bollinger Band is expanding since 7:15 Am with the price walking down the lower band.
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mixed on Wednesday, March 13 in lower volume. Dow Jones Industrial Average, Russell 2000, and NYSE Composite closed higher. Major indices opened flat to lower and the mostly traded within a narrow range for the rest of the day.

All but four S&P sectors – Consumer Discretionary, Technology, Healthcare, and Real Estate – closed higher. The dollar index closed lower, energy futures closed mixed, metals – precious and industrial – metals closed up, and the soft commodities closed mixed. The bonds closed down, i.,e., the US Treasury Yields closed higher.

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