Morning Notes – Wednesday, January 15, 2025

/ January 15, 2025

Directional Bias for the Day:

  • S&P Futures are higher at 9:00 AM. Futures jumped up more than 75 points after the release of the CPI report at 8:30 AM.
  • Odds are for an up day, with a good chance of sideways to down move from the pre-open level around 5970.00. Watch for a break above 5979.50 for clarity.
  • The notable economic data due during the day:
    • CPI (0.4% vs. 0.4% est.; prev. 0.3%) at 8:30 AM.
    • Core CPI (0.2% vs. 0.3% est.; prev. 0.3%) at 8:30 AM.
    • Empire State Manufacturing Index (-12.6 vs. 2.7 est.; prev. 0.2) at 8:30 AM
    • Beige Book at 2:00 PM.
  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 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 5927.89, 5905.17, and 5890.35.
  • Critical resistance levels for the S&P 500 are 5947.25, 5959.85, and 5993.26.
  • The key levels for E-mini futures are 5979.50, the high at 8:45 AM, and 5918.50, the high at 8:30 AM on Tuesday.

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (March 2025) closed at 5882.00, and the index closed at 5842.91 – a spread of about +39.00 points; the futures closed at 5882.25; the fair value is -0.25.
  • Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +82.00, Dow by +584 and NASDAQ by +343.50.

Markets Around the World

  • Markets in the East closed mostly lower – Hong Kong and Mumbai closed up.
  • European markets are higher.
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • NZD/USD
  • USD/CAD
  • INR/USD
  • EUR/USD
  • GBP/USD
  • AUD/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 4.793, up +21.7 basis points from two weeks ago.
    • The 30-year is at 4.980%, up +19.5 basis points.
    • The 2-year yield is at 4.384%, up +13.2 basis points.
    • The 10-Year-&-2-Year spread is at 0.409, up from 0.324.
    • The 30-Year-&-10-Year spread is at 0.187, down from 0.201.
  • VIX
    • At 17.16 @ 8:45 AM; down from the last close; below the 5-day SMA
    • Recent high = 22.04 on January 13; low = 14.27 on December 24; Sentiment: Risk-On

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

Weekly:
  • The week ending on January 10 was a relatively large Bearish Engulfing candle, breaking below a support level – the low of the week of December 16, 2024.
    • Stochastic (9,1, 3): %K is below %D.
    • RSI-9 is below 50 after making a Bearish Divergence in December.
  • The week was down -115.43 or -1.9%; the 5-week ATR is 134.33.
  • Fourth down week in the last five weeks and fifth in the previous ten weeks
  • The weekly pivot point=5885.29 R1=5962.79, R2=6098.55; S1=5749.53, S2=5672.03; R1/S1 pivot levels were breached
  • Below 10-week EMA; above 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A red spinning top candle at the high of previous day, and a previously broken support. Broke below a Descending Triangle – the 61.8% extension target is near 56566.88, which is 1% below the high, and the 100% extension target is near 5564.63, which is 9.2% below the high.
    • Stochastic (9, 1, 3): %K crossed above %D.
    • RSI-9 is around 35 and below the 8-day EMA.
  • Below 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA.
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Trending down since 2:00 PM on December 16 within a down trending regression channel; moving around the middle of the channel since 4:00 Pm on Monday.
    • RSI-9 is just below 60.
    • Above EMA20 and at/below EMA10 of EMA50.
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Broke above a range at 8:30 AM.  Up more than 130 points from the low of the range.
    • RSI-21 is just below 80.
    • Above EMA 20, which is above EMA10 of EMA50.
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways to up since 5:45 AM.
  • The Bollinger Band has been expanding since 6:00 AM with the price walking up the upper bound.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Tuesday, January 14 in mixed volume. NASDAQ Composite closed lower.  S&P 500 and NASDAQ Composite traded in higher volume. The major indices gapped up at the open, but most closed the gap during the day.

The dollar index was down; energy futures were mixed; the precious metals were up; the industrial metals were mostly up; and the soft commodities were mostly down. The US Treasury yields closed mixed, and so did the bonds. Long duration bond yields advanced and short duration fell.

From Briefing.com

The stock market had a mixed session at the index level, but the vibe under the surface was positive. 

[…]

Treasuries still responded favorably, leading the 10-yr yield settled two basis points lower at 4.79% and the 2-yr yield settled four basis points lower at 4.36%.

[…]
  • S&P Midcap 400: +1.3% YTD
  • Dow Jones Industrial Average: -0.1% YTD
  • Russell 2000: -0.5% YTD
  • S&P 500: -0.7% YTD
  • Nasdaq Composite: -1.4% YTD
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