Morning Notes – Wednesday, April 24, 2024

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM – moving sideways to downs since Tuesday’s NYSE session close between 5128.75 and 5106.50.
  • The odds are for a sideways to a down day – watch for a break above 5128.75 or a break below 5106.50 for clarity.
  • The major economic data report due during the day:
    • Durable Goods Orders (2.6% vs. 2.5% est.; prev. 1.3%) at 8:30 AM.
    • Core Durable Goods Orders (0.2% vs. 0.3% est.; prev. 0.3%) at 8:30 AM.
  • Weekly:¬†Uptrend Under Pressure
  • Daily: Market In Correction
  • 120-Min: Side-Up
  • 30-Min: Up-Side
  • 15-Min: Up-Side
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for the S&P 500 are 5058.77, 5043.41, and 5027.96.
  • Critical resistance levels for the S&P 500 are 5079.84, 5107.94, and 5121.20.
  • The key levels for E-mini futures are 5128.75, the high at 1:45 AM, and 5106.50, the low at 5:45 AM.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2024) closed at 5107.75, and the index closed at 5070.55 – a spread of about +37.25 points; the futures closed at 5106.50; the fair value is +1.25.
  • Pre-NYSE session open, futures were mixed – at 7:45 AM, the S&P 500 futures were up by +9.75, Dow down by -12, and NASDAQ up by +103.00.

Markets Around the World

  • Markets in the East closed mostly higher – Sydney closed down.
  • European markets are mostly higher – Spain and Switzerland 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 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 4.606, up +23.7 basis points from two weeks ago.
    • The 30-year is at 4.731%, up +23.0 basis points.
    • The 2-year yield is at 4.908%, up +15.5 basis points.
    • The 10-Year-&-2-Year spread is at -0.302, up from -0.384.
    • The 30-Year-&-10-Year spread is at 0.125, down 0.132.
  • VIX
    • At 15.79 @ 7:45 AM; up 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

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 large green top candle breaking above a resistance level with almost no upper and lower shadows.
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 is above 45; 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)
  • Bounced up to the upper bound of a down-trending regression channel.
    • RSI-21 has declined to below 70 from above 80 during the Asian session.
    • Above EMA20, which is above EMA10 of EMA50.
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Forming a cup handle pattern around 5110.00 level.
    • RSI-21 has declined to 60 from above 75.
    • At/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 to down since 2:00 AM.
  • The Bollinger Band is relatively flat since 8:00 AM with the price falling to the middle band from the upper band.
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Tuesday, April 23 in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in lower volume. The major indices opened higher and then mostly traded up for the rest of the day. Most indices are bouncing up from between two significant 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 but one S&P sectors – Materials – closed higher. The dollar index closed lower; energy futures closed higher; precious metals closed mixed; the industrials closed mostly lower; the soft commodities closed mixed. The bonds, and hence the US Treasury Yields, were mixed.

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