Directional Bias For The Day:

• S&P Futures are higher; moving up since 2:45 PM on Monday
• Daily and weekly trend is down
• Odds are for an up day with elevated volatility – watch for break below 2553.75 for change of fortune;
• No Key economic data due:

Markets Around The World

• Markets in the East mostly closed higher – Shanghai and Seoul closed down
• European markets are higher
• Currencies:
  

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

• Commodities:
  

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

• Bonds
  • 10-yrs yield is at 2.696%, down from January 7 close of 2.682%;
  • 30-years is at 2.981%, up from 2.978%
  • 2-years yield is at 2.553%, up from 2.541%
  • The 10-Year-&-2-Year spread is at 0.143, up from 0.141

Key Levels:

• Critical support levels for S&P 500 are 2546.76, 2522.13 and 2509.89
• Critical resistance levels for S&P 500 are 2566.16, 2585.29 and 2600.91
• Key levels for eMini futures: break above 2572.00, the high of 7:00 AM and break below 2553.75, the low of 3:00 AM

Pre-Open

• On Monday, at 4:00 PM, S&P future (January contract) closed at 2550.50 and the index closed at 2549.69 – a spread of about +0.75 points; futures closed at 2550.50 for the day; the fair value is +0.00
• Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +14.50; Dow up by +165; and NASDAQ by +41.75

Directional Bias Before Open

• Weekly: Down
• Daily: Down
• 120-Min: Side-Up
• 30-Min: Up
• 15-Min: 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 January 4 was a green candle with open above previous weeks’ close and the lower shadow reaching nearly the middle of its real body; the three-week morning star pattern is emerging Stochastics (9,1, 3) and RSI (14) moving up – %K is above %D; RSI is moving above 40 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 +46.20 or +1.9% and ATR is 94.11 Last week’s pivot point=2504.66, R1=2565.35, R2=2598.77; S1=2471.24, S2=2410.55; 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 spinning top green candle with upper shadow slightly longer than lower shadow ABCD pattern emerged on January 4th; the 61.8% extension target near 2551.00 is achieved; the 100% extension target is near 2617.00 %K is above %D and above 90; RSI-14 is near 50 Sequence of lower highs and lower lows since October 3, 2018 At/above 20-day EMA; below 50-day EMA, below 100-day SMA and 200-day SMA Downtrend
2-Hour (e-mini future)	Futures are mostly moving up since 6:00 PM on January 3; the bias since 6:00 PM on December 25 is up; higher highs and higher lows since then RSI-9 is above 65 since 8:00 AM on January 8; near 75 Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Side-Up
30-Minute (e-mini future)	Moving up since 9:30 AM on January 7; above a horizontal channel; the 61.8% extension target near 2562.00 is achieved; 100% extension target is near 2588.00 RSI-9 is above 40 since 9:00 PM on January 3; generally drifting down since 1:00 PM on January 4 after making a high above 80; made a bearish divergence on January 6 and January 7; just above 65 Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Up
15-Minute (e-mini future)	Bollinger Band (20, 2.0) is drifting up since 9:15 AM on January 7 The band was narrow from 7:45 PM to 3:00 AM; expanding since then with price mostly moving along the upper band RSI-9 is between 40 and 65 since 7:00 AM on January 7; above 65 Stochastic (9, 1, 3): %K is crossed above %D from just below 50 at 5:30 AM Bias: Up

Previous Session

Major U.S. indices closed higher on Monday January 7. The volume was lower  than previous day and also lower than 10-day average. Most major indices are breaking above 20-day EMA.

From Briefing.com:

The S&P 500 gained 0.7% on Monday, securing its fourth day of gains in the last five sessions. The Dow Jones Industrial Average gained 0.4%, the Nasdaq Composite gained 1.3%, and the Russell 2000 outperformed with a gain of 1.8%.

The major averages opened the session to some tepid buying interest. The S&P 500 briefly dipped into negative territory (-0.3%), but the pullback didn’t gain any traction as the benchmark index steadily climbed to session highs (+1.4%) by early afternoon.

[…]

Nevertheless, selling didn’t gain much traction, as nine of the 11 S&P 500 sectors finished the session with gains. The consumer discretionary (+2.4%) and energy (+1.3%) sectors outperformed, while the consumer staples (-0.3%) and utilities (-0.7%) groups dragged on the broader market.

Retail was a consistent group that outperformed and helped lift the consumer discretionary sector. The SPDR S&P Retail ETF (XRT 43.56, +1.31) rose 3.1%.

[…]

U.S. Treasuries started the session in positive territory, but spent the bulk of the day in a retreat that coincided with a rally in the stock market. The 2-yr yield rose four basis points to 2.52%, and the 10-yr yield added two basis points to 2.68%. The U.S. Dollar Index fell 0.5% to 95.70, reaching its lowest close since mid-October.

[…]

• The ISM Non-Manufacturing Index slipped to 57.6% in December (Briefing.com consensus 58.8%) from 60.7% in November. The dividing line between expansion and contraction is 50.0%, so the December reading reflects a deceleration in non-manufacturing business activity in the final month of 2018.
o The key takeaway from the report is that it follows form with the ISM Manufacturing Index in showing a slowdown in activity in December. That is in keeping with the market’s perception of economic matters and threatens to bleed into a slowdown in earnings growth.

[…]

• 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	Cross-Over
Consumer Staples	Down	XLP	SPY (Cross-Under)	Below
Energy	Down	SPY	XLE (Cross-Over)	Cross-Over
Materials	Down	XLB	XLB	Below
Industrials	Down	SPY (X-Under)	SPY	Below
Finance	Down	SPY (X-Under)	SPY	Below
Technology	Down	SPY	SPY	Below
Utility	Under Pressure	SPY (X-Under)	SPY	Below
Heath Care	Down	XLV	SPY (Cross-Under)	Below
Real Estate	Down	SPY (X-Under)	SPY	Below
Telecom	Down	SPY	XTL (Cross-Over)	Cross-Over