Directional Bias For The Day:
- S&P Futures are higher; moving higher since 0:30 AM; near a downtrend line from the high at 10:00 AM on December 13;
- Odds are for an up day but mostly sideways from pre-open levels – watch for break above 2576.00 and break below 2552.25 for clarity;
- Key economic data due:
- Building Permits ( 1.33M vs. 1.27M est. and 1.27M prev.) at 8:30 AM
- Housing Starts (1.26M vs. 1.23M est. and 1.22M prev.) at 8:30 AM
Markets Around The World
- Markets in the East closed mostly lower – Mumbai was up
- European markets are mostly lower – Germany and Italy are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.837%, down from December 17 close of 2.857%;
- 30-years is at 3.090%, down from 3.114%
- 2-years yield is at 2.671%, down from 2.696%
- The 10-Year-&-2-Year spread is at 0.166, up from 0.161
- Critical support levels for S&P 500 are 2530.54, 2521.58 and 2507.35
- Critical resistance levels for S&P 500 are 2562.62, 2576.03 and 2600.91
- Key levels for eMini futures: break above 2576.75, the high of 1:00 PM on Monday and break below 2562.00, the low of 6:00 AM
- On Monday, at 4:00 PM, S&P future (January contract) closed at 2551.50 and the index closed at 2545.94 – a spread of about +4.00 points; futures closed at 2555.75 for the day; the fair value is -4.25
- Pre-NYSE session open, futures price action is to the upside – at 7:30 AM, S&P 500 futures were up by +16.50; Dow by +147; and NASDAQ by +49.75
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: In Correction
- 120-Min: Down
- 30-Min: Down-Side
- 15-Min: Down-Side
- 6-Min: 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 sharply lower on Monday December 17. Indices broke below recent lows, which were acting as support. Major indices, except Dow Jones Industrial Average and NASDAQ Composite, broke below prior 2018 lows. The volume was higher.
The S&P 500 lost 2.1% on Monday, as uncertainty surrounding a host of issues continued to drive an inclination to sell into strength and to reduce risk exposure to stocks. The benchmark index (2545.94) ran into resistance at the 2600 level amid a morning rebound effort before steadily backpedaling throughout the afternoon and re-testing its February low (2532.69). That re-test invited some late buying interest that enabled the indices to close off their worst levels of the day.
The Dow Jones Industrial Average (-2.1%), the Nasdaq Composite (-2.3%), and the Russell 2000 (-2.3%) also squandered intraday rebound efforts to finish near session lows. The tech-sensitive Nasdaq is now negative for the year, and the small-cap Russell 2000 has fallen more than 20.0% from its yearly high.
The degree of pessimism is picking up noticeably, evidenced by the widespread de-risking activity. No sector was safe today. All 11 sectors ended in negative territory, with losses ranging from 1.0% (financials) to 3.7% (real estate).
Softening economic data also fueled concerns about the growth outlook and compounded the market’s negative bias. The NAHB Housing Market Index for December fell from 60 to 56 (Briefing.com consensus 61), which is its lowest level in nearly four years. The Empire Manufacturing Index for December, meanwhile, dropped to 10.9 (Briefing.com consensus 20.0) from 23.3.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – November)||Relative Strength (Current)||%K vs. %D|
|Consumer Staples||Under Pressure||XLP||XLP||Cross-Under|
|Industrials||Down||XLI (Cross – Over)||XLI||Below|
|Heath Care||Under Pressure||XLV (Cross – Over)||XLV||Cross-Under|