Morning Notes – Monday, March 20, 2023

Directional Bias For The Day:

• S&P Futures are higher at 9:00 AM; bounced up more than 60 points from the 4:15 AM low of 3897.25;
• The odds are for a choppy day with large swings – watch for a break above 3978.25 and a break below 3925.00
• No major economic data report is due during the day:

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3901.68, 3864.11, and 3838.24
• Critical resistance levels for S&P 500 are 3932.47, 3964.46, and 3995.57
• The key levels for E-mini futures are a break above 3978.25, a high at 8:15 PM on Sunday,  and a break below 3937.25, a low at 7:45 AM

Pre-Open

• On Friday at 4:00 PM, S&P futures (June 2023) closed at 3948.00, and the index closed at 3916.64 – a spread of about +31.25 points; the futures closed at 3947.00; the fair value is +1.0
• Pre-NYSE session open, futures were higher – at 9:00 AM, S&P 500 futures were up by +7.75, Dow by +93, and NASDAQ by +3.25

Markets Around The World

• Markets in the East closed lower
• European markets are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower
  • Precious metals are higher
  • Industrial metals are lower
  • Soft commodities are mostly lower
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.395, down -56.9 basis points from two weeks ago;
  • The 30-year is at 3.598%, down -28.9 basis points;
  • The 2-year yield is at 3.825%, down -104.6 basis points;
  • The 10-Year-&-2-Year spread is at -0.430, up from -0.907
  • The 30-Year-&-10-Year spread is at 0.203, up from -0.077
• VIX
  • At 26.15 @ 8:45 AM; up from the last close; above the 5-day SMA;
  • Recent high = 30.81 on March 13; low = 18.16 on March 3
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed lower on Friday, March 17, in mixed volume. S&P 500 and NASDAQ Composite traded in higher volume.

All S&P sectors closed down. Major indices opened flat and then traded down for rest of the day.

From Briefing.com:

[…] On this quadruple witching options expiration day, investors had a risk-off mentality due to ongoing pressure in the banking sector. […] The SPDR S&P Bank ETF (KBE) fell 5.6% and the SPDR S&P Regional Bank ETF (KRE) fell 6.0%. […] Selling efforts were otherwise broad in nature. While the Vanguard Mega Cap Growth ETF (MGK) slipped just 0.3%, the Invesco S&P 500 Equal Weight ETF (RSP) fell 1.7% and the market-cap weighted S&P 500 fell 1.1%. […] All 11 S&P 500 sectors logged a loss today with information technology (-0.1%) and communication services (-0.5%) sitting atop the leaderboard. Meanwhile, the financial sector (-3.3%) suffered the steepest decline, along with real estate (-2.3%) and industrials (-1.6%). Nasdaq Composite: +11.1% YTD S&P 500: +2.0% YTD S&P Midcap 400: -2.3% YTD Russell 2000: -2.0% YTD Dow Jones Industrial Average: -3.9% YTD […] Total industrial production was unchanged month-over-month in February (Briefing.com consensus +0.5%) following an upwardly revised revised 0.3% increase (from 0.0%) in January. The capacity utilization rate held steady at 78.0% (Briefing.com consensus 78.5%) following a downward revision to 78.0% (from 78.3%) for January. […] Leading Indicators fell 0.3% in February (Briefing.com consensus -0.4%) following a 0.3% decline in January. The preliminary University of Michigan Consumer Sentiment Index for March dropped to 63.4 (Briefing.com consensus 67.2) from 67.0 in February. In the same period a year ago, the index stood at 59.4. Note: Roughly 85% of responses had been recorded prior to the failure of Silicon Valley Bank. […]