Morning Notes – Tuesday, April 23, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM – moving above a cup-with-handle pattern on the 15-minute chart.
  • The odds are for an up day – watch for a break below 5051.50 for a change of sentiments.
  • The major economic data report due during the day:
    • Flash Manufacturing PMI (52.0 est.; prev. 51.9) at 9:45 AM.
    • Flash Services PMI (52.0 est.; prev. 51.7) at 9:45 AM.
    • New Homes Sales (668K est.; prev. 662K) at 10:00 AM
    • Richmond Manufacturing Index (-7 est.; prev.-11) at 10:00 AM.
  • Weekly:¬†Uptrend Under Pressure
  • Daily: Market In Correction
  • 120-Min: Down-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for the S&P 500 are 5021.61, 5004.93, and 4969.40.
  • Critical resistance levels for the S&P 500 are 5038.23, 5056.66, and 5077.96.
  • The key levels for E-mini futures are 5076.75, the high at 2:30 PM on Monday, and 5051.50, the low at 8:15 AM.

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2024) closed at 5048.50, and the index closed at 5010.60 – a spread of about +38.50 points; the futures closed at 5047.50; the fair value is +1.00.
  • Pre-NYSE session open, futures were higher – at 9:00 AM, the S&P 500 futures were up by +19.50, Dow by +118, and NASDAQ by +77.50.

Markets Around the World

  • Markets in the East closed mostly higher – Shanghai and Seoul closed down.
  • European markets are higher.
  • 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 lower.
    • Precious metals are lower.
    • Industrial metals are mostly lower.
    • Soft commodities are mixed.
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.614, up +18.4 basis points from two weeks ago.
    • The 30-year is at 4.718%, up +16.8 basis points.
    • The 2-year yield is at 4.976%, up +17.7 basis points.
    • The 10-Year-&-2-Year spread is at -0.362, up from -0.369.
    • The 30-Year-&-10-Year spread is at 0.104, down 0.120.
  • VIX
    • At 16.56 @ 8:45 AM; down from the last close; below the 5-day SMA
    • Recent high = 21.36 on April 19; low = 14.59 on April 10; Sentiment: Risk-Neutral-On

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

Weekly:
  • The week ending on April 19 was a relatively large red candle with almost no 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 below the %D.
    • RSI-9 has declined to just above 60 from above 75.
  • The week was down -156.18 or -3.0%; the 5-week ATR is 131.01.
  • Third down week in the last five weeks and sixth in the previous ten weeks
  • The weekly pivot point=5029.74, R1=5105.92, R2=5244.61; S1=4891.05, S2=4814.87; S1/S2/S3 pivot levels were breached
  • Below 10-week EMA; above 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A relatively small green Spinning top candle at/below a resistance level, which was a support level until last week.
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 turned above 30; above 8-day EMA.
  • Below 20-day EMA and 50-day EMA; above 100-day SMA, and 200-day SMA.
  • Market In Correction
2-Hour (E-mini futures)
  • Trending down within a regression channel since March 31 – bounced up to the middle band from the lower bound of the channel.
    • RSI-21 has moved above 65 from below 20 on April 18.
    • At/above EMA20, which is above EMA10 of EMA50.
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Drifting higher since 3:30 PM on Friday.
    • RSI-21 has been moving above 50 since 4:00 PM on Monday.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 2:30 AM.
  • The Bollinger Band has been expanding a little since 3:45 Am with the price near the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Monday, April 22 in lower volume. FT Wilshire 5000 Total Market Index closed lower. The major indices gapped up at the open and then after a brief retreat, which closed the gap for most, they moved higher before giving up a little near the close. Most indices are between two strong levels – the lows of February 22’s up-gap are acting as a resistance and the lows of February 13’s reversal are acting as a support.

All S&P sectors closed higher. The dollar index and metals – precious and industrials – closed lower; energy futures closed mixed and most of the soft commodities closed higher. The bonds, and hence the US Treasury Yields, were mixed.

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