Morning Notes – Thursday, April 4, 2024

/ April 4, 2024

Directional Bias for the Day:

  • S&P Futures have been drifting higher since 6:30 PM.
  • The odds are for an up day – watch for a break below 5274.25 and 5267.75 for a change of sentiments.
  • The major economic data report due during the day:
    • Unemployment Claims (213K est.; prev. 210K) at 8:30 AM.
    • Trade Balance (-66.9B est.; prev. -67.4B) at 8:30 AM.
  • Weekly: Up
  • Daily: Uptrend
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side
  • 6-Min: Side

Key Levels:

  • Critical support levels for the S&P 500 are 5228.75, 5215.83, and 5198.04.
  • Critical resistance levels for the S&P 500 are 5235.64, 5247.24, and 5263.95.
  • The key levels for E-mini futures are 5285.75, the high at 7:00 AM, and 5274.75, the low at 2:15 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2024) closed at 5265.25, and the index closed at 5211.49 – a spread of about +53.75 points; the futures closed at 5266.50; the fair value is -1.25.
  • Pre-NYSE session open, futures were higher – at 7:30 AM, the S&P 500 futures were up by +15.75, Dow by +98, and NASDAQ by +73.00.

Markets Around the World

  • Markets in the East closed higher – Shanghai and Hong Kong were closed.
  • European markets are mostly higher – France and Italy 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 higher.
    • Precious metals are higher.
    • Industrial metals are higher.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.355, up +8.2 basis points from two weeks ago.
    • The 30-year is at 4.509%, up +5.4 basis points.
    • The 2-year yield is at 4.681%, up +7.6 basis points.
    • The 10-Year-&-2-Year spread is at -0.326, up from -0.338.
    • The 30-Year-&-10-Year spread is at 0.154, down +0182.
  • VIX
    • At 14.19 @ 7:30 AM; down from the last close; above the 5-day SMA
    • Recent high = 16.04 on March 11; low = 12.40 on March 21; Sentiment: Risk-On

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

Weekly:
  • The week ending on March 29 was a green spinning top candle at the all-time highs with small upper and lower shadows.
  • 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 above the %D; near 100.
    • RSI-9 is above 80.
  • The week was up +20.17 or +0.4%; the 5-week ATR is 101.93.
  • Third up week in the last five weeks and seventh in the previous ten weeks
  • The weekly pivot point=5240.87, R1=5278.33, R2=5302.30; S1=5216.90, S2=5179.44; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A relatively small Bullish Engulfing candle with almost no lower shadow and a small upper shadow following a Dragonfly Doji that gapped down forming an island below all-time high.
  • Moving up within an upsloping channel since late October 2023.
    • Stochastic (9, 1, 3): %K is below the %D after making a Bearish Divergence
    • RSI-9 is making a coiling pattern since January; turned up to 55; 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 early-January. The price broke below the lower band of the channel on April 2 before rising up into it.
    • RSI-21 has bounced up to above 60 from below 20 on April 2.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Broke above a down sloping flag at 9:30 AM on Wednesday – the 100% extension target around 5272.00 is achieved and the 161.8% extension target is around 5290.00.
    • RSI-21 has been moving between 50 and 60 since 9:30 AM on Wednesday.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting higher since 9:00 PM.
  • The Bollinger Band has been contracting a bit since 7:00 AM.
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Wednesday, April 3 in mixed volume. Dow Jones Industrial Average closed down. Tow Dow Jones averages – Industrials and Transports – traded in higher volume. The major indices opened higher and made day’s highs by mid-day before moving sideways to down for the rest of the day.

All but four S&P sectors – Staples, Financials, Utilities, and Healthcare – closed higher. The dollar index closed down, the energy futures closed mixed, metals closed higher. and the soft commodities closed mixed. The US Treasury Yields closed mixed.

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