Directional Bias For The Day:
- S&P Futures are higher; moving lower since 7:30 AM; mostly moving up in an up-sloping channel since 3:45 PM on October 31
- Odds are for an up to sideways day with choppiness and elevated volatility – watch for break above 2727.25 and break below 2707.25 for more clarity
- Key economic data due:
- Prelim Nonfarm Productivity (2.2% vs. 2.2% est. and 2.9% prev.) at 8:30 AM
- Prelim Labor Cost (1.2% vs. 1.1% est. and -1.0% prev.) at 8:30 AM
- Unemployment Claims (214K vs. 213K est. and 216K prev.) at 8:30 AM
Markets Around The World
- Markets in the East closed mixed – Shanghai, Hong Kong, Sydney and Singapore closed up; Tokyo, Mumbai and Seoul closed down
- European markets are mostly higher – U.K and France are down
- Dollar index
- Crude Oil
- 10-yrs yield is at 3.163%, up from October 31 close of 3.159%;
- 30-years is at 3.414%, up from 3.402%
- 2-years yield is at 2.875%, down from 2.793%
- The 10-Year-&-2-Year spread is at 0.288, up from 0.280
- Critical support levels for S&P 500 are 2705.60, 2685.43 and 2672.45
- Critical resistance levels for S&P 500 are 2729.38, 2736.69 and 2753.59
- Key levels for eMini futures: break above 2727.25, the high of 6:30 AM and break below 2707.25, the low of 3:30 AM
- On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2711.50 and the index closed at 2711.74 – a spread of about -0.25 points; futures closed at 2711.00 for the day; the fair value is +0.50
- Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up +4.00; Dow by +73; and NASDAQ by +6.00
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: In Correct
- 120-Min: Down-Side
- 30-Min: Up
- 15-Min: Up-Side
- 6-Min: Up-Side
The trend and patterns on various time frames for S&P 500 are:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed higher on Wednesday October 31. The volume was mixed. Dow Jones Transportation Average and Russell 2000 traded in higher volume from Tuesday and others in lower volume. The indices gapped up at the open and the moved higher. The indices gave up a lot of day’s gain near the close, however, most did not fill the gap. Only three S&P Sectors – Consumer Staples, Utilities and Real Estate – were down.
The S&P 500 advanced 1.1% on Wednesday, securing a second straight day of gains to end a bruising October with a monthly loss of 6.9%.
The tech-sensitive Nasdaq Composite surged 2.0%, reducing its monthly loss to 9.2%, while the Dow Jones Industrial Average gained 1.0% to reduce its monthly loss to 5.1%. Small caps underperformed, with the Russell 2000 adding 0.3% to bring its monthly loss to 10.9%.
Also, the rate-sensitive and heavily-weighted financials sector outperformed the broader market with a gain of 1.4%.
Conversely, underperforming sectors on Wednesday included the defensive-oriented consumer staples (-0.9%), utilities (-1.2%), and real estate (-1.4%) groups.
Separately, WTI crude extended its recent decline, losing 1.3% to $65.31/bbl, reaching its lowest level since August.
International equity markets finished Wednesday on a higher note. In Asia, Japan’s Nikkei gained 2.1% after the Bank of Japan made no changes to its policy stance, and China’s Shanghai Composite added 1.4% to notch its second consecutive gain. Meanwhile, the Euro STOXX 50 tallied a 1.6% gain with France’s CAC (+2.3%) leading the advance.
The key takeaway from the report [employment cost index ] is that it corroborates a trend of rising compensation costs for civilian workers that have been discussed by employers and which have kept the Federal Reserve on a tightening path.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month)||Relative Strength (Current)||%K vs. %D|
|Consumer Staples||Under Pressure||SPY||XLP|
|Heath Care||Under Pressure||XLV||SPY|
|Real Estate||Down (Turning Up)||SPY||XLRE|