Morning Notes – Thursday, April 11, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Futures bounced up from a low of 5173.50 before the release of the PPI report at 8:30 AM to above 5210.00.
  • The futures are within a trading range between 5173.5 and 5226.50 since 8:45 AM on Wednesday.
  • The odds are for a sideways move within a trading range with elevated volatility.¬†Watch for a break above 5226.50 or a break below 5173.50 for clarity.
  • The major economic data report due during the day:
    • ECB Main Refinancing Rate (4.5% vs. 4.5% est.; prev. 4.5%) at 8:15 AM.
    • ECB Monetary Policy Statement at 8:15 AM
    • PPI m/m (0.2% vs. 0.3% est.; prev. 0.6%) at 8:30 AM.
    • Core PPI m/m (0.2% vs. 0.2% est.; prev. 0.3%) at 8:30 AM.
    • Unemployment Claims (211K vs. 216K est.; prev. 222K) at 8:30 AM
    • ECB Pres Conference at 8:45 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 5138.70, 5131.69, and 5104.35.
  • Critical resistance levels for the S&P 500 are 5167.54, 5157.88, and 5192.39.
  • The key levels for E-mini futures are 5215.00, the high at 3:15 PM on Wednesday, and 5173.50, the low at 8:30 AM.

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2024) closed at 5205.25, and the index closed at 5160.64 – a spread of about +54.75 points; the futures closed at 5207.75; the fair value is -2.50.
  • Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +2.50, Dow by +11, and NASDAQ by +45.75.

Markets Around the World

  • Markets in the East closed mostly lower – Shanghai and Seoul closed up; Hong Kong, Tokyo, Sydney, and Singapore closed down; Mumbai was closed.
  • European markets are lower.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/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 4.550, up +31.2 basis points from two weeks ago.
    • The 30-year is at 4.631%, up +23.6 basis points.
    • The 2-year yield is at 4.979%, up +37.8 basis points.
    • The 10-Year-&-2-Year spread is at -0.429, up from -0.363.
    • The 30-Year-&-10-Year spread is at 0.081, down 0.157.
  • VIX
    • At 16.66 @ 7:45 AM; up from the last close; above the 5-day SMA
    • Recent high = 16.92 on April 4; low = 12.40 on March 21; Sentiment: Risk-Off

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

Weekly:
  • The week ending on April 5 was a Bearish Engulfing with a long lower shadow near 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 crossed below the %D from above 90.
    • RSI-9 is above 75.
  • The week was down -50.01 or -1.0%; the 5-week ATR is 108.90.
  • Third down week in the last five weeks and fourth in the previous ten weeks
  • The weekly pivot point=5204.78, R1=5263.51, R2=5322.67; S1=5145.62, S2=5084.22; S1/S2/S3 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A Doji candle that opened down with the real body within the real body of the large Bearish Engulfing candle of April 4.
  • At the lower band of an upsloping channel since late October 2023.
    • Stochastic (9, 1, 3): %K is below the %D.
    • RSI-9 has dropped to just above 50; below 8-day EMA.
  • Below 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA.
  • Uptrend
2-Hour (E-mini futures)
  • Attempting to break below the lower band of a trading range between 5333.50 and 5167.75 since early-March.
    • RSI-21 is just above 20.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Bouncing up from a support around 5176.50.
    • RSI-21 has been bouncing up from around 30 at 8:30 Am after making a Bullish Divergence.
    • Below EMA20, which is below EMA10 of EMA50.
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to down since 1:15 PM on Wednesday.
  • The Bollinger Band is expanding since 4.30 AM. The price first walked down the lower band and then bounced up to the upper band at 8:30 AM.
  • Bias: Side

Previous Session

Major U.S. indices closed lower on Wednesday, April 10 in mostly higher volume. Dow Jones Industrial Average traded in lower volume. The major indices gapped down at the open and after the initial up-down- move settled into a sideways to down trend for the rest of the day.

All but one S&P sectors – Energy – closed lower. The dollar index closed up, the energy futures closed up, precious metals closed down, the industrial metals closed lower. and the soft commodities closed mixed. The bonds dropped and the US Treasury Yields rose.

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