Morning Notes – Monday, January 23, 2023

Directional Bias For The Day:

  • S&P Futures are a bit higher at 9:00 AM; futures are moving sideways around 3990.00
  • The odds are for a sideways to an up day with elevated volatility – watch for a break above 4000.00 and a break below 3980.25 for clarity.
  • No major economic data report is due during the day.

Directional Bias Before Open:

  • Weekly: In Correction
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Up
  • 30-Min: Up-Side
  • 15-Min: Side
  • 6-Min:  Side-Up

Key Levels:

  • Critical support levels for S&P 500 are 3961.28, 3951.22, and 3940.12
  • Critical resistance levels for S&P 500 are 3985.20, 3997.86=5, and 4014.16
  • The key levels for E-mini futures are a break above 4000.00, the high at 8:15 AM, and a break below 3980.25, the low at 6:45 AM


  • On Friday at 4:00 PM, S&P futures (March 2023) closed at 3987.75, and the index closed at 3972.61 – a spread of about +15.25 points; the futures closed at 3988.50; the fair value is -0.75
  • Pre-NYSE session open, futures were higher – at 9:00 AM, S&P 500 futures were up by +5.50, Dow by +90, and NASDAQ by +19.25

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai, Hong Kong, Seoul, and Singapore were closed
  • European markets are mostly higher
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are mixed
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.536, down -3.3 basis points from two weeks ago;
    • The 30-year is at 3.709%, up +1.7 basis points;
    • The 2-year yield is at 4.194%, down -8.9 basis points;
    • The 10-Year-&-2-Year spread is at -0.658 up from -0.714
    • The 30-Year-&-10-Year spread is at 0.173, up from 0.123
  • VIX
    • At 20.02 @ 8:15 AM; up from the last close; at/above the 5-day SMA;
    • Recent high = 23.76 on January 3; low = 18.01 on January 13
    • Sentiment: Risk-On-to-Neutral

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

  • The week ending on January 20 was a small red candle with a small upper shadow and a long lower shadow
    • Stochastic (9,1, 3): %K is above %D; just below 60;
    • RSI-9 is around 55
  • The week was up +104.01 or +2.7%; the 5-week ATR  is 142.86
  • A down week, third in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=3957.85, R1=4030.15, R2=4087.70; S1=3900.30, S2=3828.00; S1 pivot level was breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Under Pressure
  • A relatively large green candle with almost no upper and lower shadows, a three-day Morning Star pattern is emerging.
    • Stochastic (9, 1, 3): %K crossed above %D;
    • RSI-9 has turned up to near 60; at/below 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Moving sideways since 4:00 PM on Friday after rising almost 100 points from Thursday’s low around 3900.00
    • RSI-21 is near 80
    • Above EMA20, which is above EMA10 of EMA50 
  • Bias:  Side-Up
30-Minute (E-mini futures)
  • Moving sideways since 3:30 PM on Friday around 3990.00
    • RSI-21 is moving sideways to down around 65
    • 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 sideways since 9:15 PM
  • The Bollinger Band has been expanding a bit since 8:15 AM
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Friday, January 20, in mostly higher volume. Dow Jones Transportation Average traded in lower volume. Major indices opened up and then traded higher for the rest of the day. All S&P sectors closed up.

For the week, the major US indices closed mostly down. NASDAQ Composite closed higher. Most markets in Ais closed up, and the European markets were mixed. The dollar index was down, the energy futures were mixed, and so were the precious and industrial metals and soft commodities. The US Treasury yields were up.



The stock market finished the week on a positive note after recent weakness. The broad rebound effort had the Nasdaq Composite recoup all of its losses for the week while the S&P 500 and Dow Jones Industrial Average put a nice dent in their weekly losses.


All 11 S&P 500 sectors closed with a gain. Communication services (+4.0%) led the pack by a wide margin thanks to Netflix and Alphabet. Other top performers today were the information technology (+2.7%) and consumer discretionary (+2.5%) sectors, reflecting renewed interest in the mega cap space.


By the close, advancers led decliners by a 4-to-1 margin at the NYSE and a nearly 3-to-1 margin at the Nasdaq.


The 2-yr Treasury note yield rose eight basis points today, and fell two basis points this week, to 4.20%. The 10-yr note yield rose nine basis points today, and fell three basis points this week, to 3.48%.

  • Nasdaq Composite: +6.4% YTD
  • Russell 2000: +6.0% YTD
  • S&P Midcap 400: +5.3% YTD
  • S&P 500: +3.5% YTD
  • Dow Jones Industrial Average: +0.7% YTD
  • December Existing Home Sales 4.02 mln ( consensus 3.96 mln); Prior was revised to 4.08 mln from 4.09 mln
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