Directional Bias For The Day:

• S&P Futures are higher; moving higher since 7:30 PM on Thursday;
• Daily and weekly trend is down
• Odds are for an up day with choppiness and elevated volatility – watch for break below 2470.75 for change of fortune;
• Key economic data due:
  • Non-Farm Employment Change (312K vs. 179K; 155K Prev.) at 8:30 AM
  • Average Hourly Earnings (0.4% vs. 0.3% est.; 0.2% prev.) at 8:30 AM
  • Unemployment Rat (3.9% vs. 3.7% est.; 3.7% prev.) at 8:30 AM

Markets Around The World

• Markets in the East closed mostly up – Tokyo and Sydney closed down
• European markets are higher
• Currencies:
  

  Up	Down
  Dollar index EUR/USD GBP/USD USD/JPY USD/CHF AUD/USD	NZD/USD USD/CAD USD/INR

• Commodities:
  

  Up	Down
  Crude Oil NatGas Silver Copper Platinum Palladium Sugar Cotton	Gold Coffee Cocoa

• Bonds
  • 10-yrs yield is at 2.621%, down from January 3 close of 2.625%;
  • 30-years is at 2.947%, down from 2.949%
  • 2-years yield is at 2.459%, up from 2.696%
  • The 10-Year-&-2-Year spread is at 0.162, down from 0.168

Key Levels:

• Critical support levels for S&P 500 are 2443.96, 2397.94 and 2346.58
• Critical resistance levels for S&P 500 are 2488.04, 2495.01 and 2519.49
• Key levels for eMini futures: break above 2486.75, the high of 6:00 AM and break below 2470.75, the low of 8:30 AM

Pre-Open

• On Thursday, at 4:00 PM, S&P future (January contract) closed at 2448.25 and the index closed at 2447.89 – a spread of about +0.25 points; futures closed at 2447.75 for the day; the fair value is -0.50
• Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +25.25; Dow by +239; and NASDAQ by +77.25

Directional Bias Before Open

• Weekly: Down
• Daily: Down
• 120-Min: Side
• 30-Min: Down-Side
• 15-Min: Side-Up
• 6-Min: Up

The trend and patterns on various time frames for S&P 500 are:

Monthly	Under Pressure October 2018 closed sharply lower; broke below previous four months’ lows; only third down month since October 2016; November was a harami spinning top near the lower end of October Uptrend resumption since Feb 08, 2016 after a pull back of -15.2% – continues; higher highs and higher lows
Weekly:	The week ending on December 28 was a green candle with a real body reaching the middle of previous week’s red candle making it a piercing formation Stochastics (9,1, 3) and RSI (14) turned up – %K crossed above %D from near 0; RSI has turned up too from just above 30 The index reached below the 50% Fibonacci retracement level – at 2374.98 – from the rally from February 2016 low and reached a low of 2346.58; the 61.8% Fibonacci retracement is near 2251.86 During the week of October 22, Stochastics reached the lowest since the week of October 31, 2016; last week RSI reached the lowest since the week on August 15, 2011; Last week was up +69.12 or +2.9% and ATR is 173.69 Last week’s pivot point=2450.86, R1=2555.15 R2=2624.55; S1=2381.46, S2=2277.17; No pivot levels were breached; An up week; second in last five weeks and fourth in last ten weeks The break above an ascending triangle in May 2018 is nullified as the price has fallen below its low The break above a down sloping flag on April 24 2017 is also nullified; the 161.8% extension target near 2835.46 was achieved; 100% extension target of a longer flag-pole near 2913.13 is achieved Last swing low, 2532.69, was the low on February 5, 2018 and breached in December 2018 Below 10-week EMA and 39-week SMA; below 89-week SMA (first since June 27, 2016) Downtrend
Daily	A red real bodied candle that opened near the middle of previous real body and closed below it %K turning down %D from near 70; RSI-9 is turning down 40 from just above Sequence of lower highs and lower lows since October 3 2018 Below 20-day EMA , 50-day EMA, below 100-day SMA and 200-day SMA Downtrend
2-Hour (e-mini future)	Futures are mostly moving sideways since 4:00 PM on December 27 between 2523.00 and 2438.50; rising since 6:00 PM on Thursday; breaking above a downtrend line form January 2 high RSI-9 declining since 6:00 AM after making a bearish divergence Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Side
30-Minute (e-mini future)	Moving sideways since 3:30 PM on December 27 RSI-9 rising since 2:30 PM on Tuesday and made bullish divergence twice At/below 20-bar EMA, which is at/below EMA10 of EMA50 Bias: Down-Side
15-Minute (e-mini future)	Bollinger Band (20, 2.0) is mostly moving up since 9:30 PM on Wednesday The band was same size since 9:30 PM RSI-9 moving down since 6:30 AM from just above 65; just above 50 Stochastic (9, 1, 3): %K is crossed below %D from above 90 after making bearish divergence Bias: Side-Up

Previous Session

Major U.S. indices closed lower on Thursday January 3. The volume was higher than on Wednesday but lower than 10-day average.

Major indices gapped down at the open from previous close and opened near the middle of the real-body of Wednesday and then closed below its low. A break below Thursday’s low will be bearish and a break above its high will continue the bounce that started on December 26.

From Briefing.com:

The S&P 500 dropped 2.5% on Thursday, as a revenue warning from Apple (AAPL 142.19, -15.73, -10.0%) and weak manufacturing data stoked worries about a slowdown in global economic growth. The Dow Jones Industrial Average lost 2.8%, the Nasdaq Composite lost 3.0%, and the Russell 2000 lost 1.8%.

Nine of the 11 S&P 500 sectors finished in the red. The heavily-weighted information technology sector led the retreat with a loss of 5.1%, as Apple dragged on the group with a steep loss of 10.0%, which sent the stock to a level not seen since mid-2017. The industrials (-3.0%) and materials (-2.8%) sectors also underperformed the broader market.

[…]

Fears over growth and corporate earnings had investors flocking to risk-free U.S. Treasuries. Consequently, the 2-yr yield and 10-yr yield fell 11 basis points each, to 2.38% and 2.55%, respectively. The rally in Treasuries took place amid building expectations for a rate cut by the end of the year. The fed funds futures market now sees a 46.1% implied likelihood of a rate cut in December, up sharply from yesterday’s implied probability of just 9.6%. The U.S. Dollar Index lost 0.6% to 96.23.

[…]

• The ISM Manufacturing Index for December decreased to 54.1% (Briefing.com consensus 57.8%) from 59.3% in November.
o The key takeaway from the report is that the December decrease was fueled by a sharp pullback in the New Orders component, which is the same element that lifted the November ISM Manufacturing Index into the neighborhood of its high from 2018.

• S&P 500 Sectors

Sector	Daily Trend (Visual)	Relative Strength (Last Month – December)	Relative Strength (January)	%K vs. %D (January)
Consumer Discretionary	Down	XLY (X-Over)	XLY	Below
Consumer Staples	Under Pressure	XLP	SPY (X-Under)	Below
Energy	Down	SPY	XLE (X-Over)	Cross-Over
Materials	Side	XLB	SPY (X-Under)	Below
Industrials	Down	SPY (X-Under)	SPY	Below
Finance	Down	SPY (X-Under)	XLF (X-Over)	Below
Technology	Down	SPY	SPY	Below
Utility	Under Pressure	SPY (X-Under)	XLU	Below
Heath Care	Under Pressure	XLV	SPY (X-Under)	Below
Real Estate	Up	SPY (X-Under)	SPY	Below
Telecom	Down	SPY	SPY	Below