Directional Bias For The Day:
- S&P Futures are higher to little changed; moving lower since 7:30 PM on Sunday high of 2551.75, which was 20.50 pointes above Friday’s close
- Daily and weekly trend is down
- Odds are for a sideways to down up day with choppiness and elevated volatility – watch for break above 2535.50 for change of fortune;
- Key economic data due:
- ISM Non-Manufacturing PMI (57.6 vs. 59.6 est.; 60.7 prev.) at 10:00 AM
Markets Around The World
- Markets in the East higher
- European markets are mostly down -Spain and Italy are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.643%, down from January 4 close of 2.659%;
- 30-years is at 2.950%, down from 2.974%
- 2-years yield is at 2.471%, down from 2.491%
- The 10-Year-&-2-Year spread is at 0.172, up from 0.168
- Critical support levels for S&P 500 are 2522.13, 2509.89 and 2488.33
- Critical resistance levels for S&P 500 are 2538.07, 2558.80 and 2565.27
- Key levels for eMini futures: break above 2534.50, the high of 8:00 AM and break below 2523.25, the low of 6:00 AM
- On Friday, at 4:00 PM, S&P future (January contract) closed at 2532.75 and the index closed at 2531.94 – a spread of about +0.75 points; futures closed at 2531.25 for the day; the fair value is +1.50
- Pre-NYSE session open, futures price action is little changed – at 9:15 AM, S&P 500 futures were up by +2.25; Dow up by +67; and NASDAQ down by -0.75
Directional Bias Before Open
- Weekly: Down
- Daily: Down
- 120-Min: Side
- 30-Min: Up-Side
- 15-Min: Up-Side
- 6-Min: Down
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 higher on Friday January 4 following a very good non-farm payroll report for December. The volume was lower than that on Thursday and also lower than 10-day average. The major indices broke above the higher or congestion zone near the end of December and forming ABCD type of pattern.
For the week, the major indices closed higher and potentially making 3-week morning star pattern. The volume was mixed and only Russell 2000 and Dow Jones Transportation Average traded in higher volume than previous week. All but two – Utilities and Real Estate – S&P sectors were up for the week.
Wall Street kicked off the first week of 2019 on a higher note, as robust jobs data and soothing commentary from Fed Chair Jerome Powell helped press pause on global growth concerns.
The S&P 500 gained 1.9%, the Dow Jones Industrial Average gained 1.6%, the Nasdaq Composite gained 2.3%, and the Russell 2000 gained 3.2%.
Headline payroll growth in the Employment Situation Report for December was comfortably ahead of estimates while average hourly earnings (+0.4%) increased more than expected, lifting the year-over-year growth rate to 3.2%.
U.S. Treasuries underwent wild swings this week amid the fragility in investor sentiment. At the end of the week, the 2-yr yield declined four basis points to 2.48%, and the 10-yr yield declined eight basis points to 2.66%. The U.S. Dollar Index lost 0.2% to 96.17. WTI crude rose 6.0% to $48.03/bbl.
- 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|
|Finance||Down||SPY (X-Under)||XLF (X-Over)||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|