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
- Dollar index
- Crude Oil
- 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
- 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
- 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:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
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|
|Utility||Under Pressure||SPY (X-Under)||SPY||Below|
|Heath Care||Down||XLV||SPY (Cross-Under)||Below|
|Real Estate||Down||SPY (X-Under)||SPY||Below|