Directional Bias For The Day:

• S&P Futures are higher; moving sideways since 8:00 PM on Tuesday
• Horizontal channel emerging on 30-minute timeframe – high 2587.25 and low 2575.00
• Daily and weekly trend is down
• Odds are for a sideways to down day (from pre-open level) with elevated volatility – watch for break above 2587.25 and break below 2575.00 for clarity
• Key economic data due:
  • FOMC December Meeting Minutes at 2:00 PM

Markets Around The World

• Markets in the East closed higher
• European markets are higher
• Currencies:
  

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

• Commodities:
  

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

• Bonds
  • 10-yrs yield is at 2.750%, up from January 8 close of 2.716%;
  • 30-years is at 3.030%, up from 2.993%
  • 2-years yield is at 2.602%, up from 2.541%
  • The 10-Year-&-2-Year spread is at 0.148, up from 0.126

Key Levels:

• Critical support levels for S&P 500 are 2554.71, 2546.76 and 2522.13
• Critical resistance levels for S&P 500 are 2579.82, 2585.29 and 2600.91
• Key levels for eMini futures: break above 2587.25, the high of 9:30 AM and break below 2575.00, the low of 7:00 AM

Pre-Open

• On Tuesday, at 4:00 PM, S&P future (January contract) closed at 2574.50 and the index closed at 2574.41 – a spread of about +0.00 points; futures closed at 2572.50 for the day; the fair value is +2.00
• Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +10.75; Dow by +117; and NASDAQ by +35.25

Directional Bias Before Open

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

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 relatively small green candle with small upper shadow and long 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 above 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 mostly declining since making a high of 79.17 at 10:00 AM on January 7; made couple of bearish divergences; below 60 Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Side-Up
30-Minute (e-mini future)	Moving sideways since 8:00 PM on January 8; above a horizontal channel; the 100% extension target near 2588.00 is achieved RSI-9 is declining since midnight from a high of 66.09; made few bearish divergences; below 50 At/below 20-bar EMA, which is above EMA10 of EMA50 Bias: Up-Side
15-Minute (e-mini future)	Bollinger Band (20, 2.0) is drifting sideways to down since 9:30 PM on January 8 The band was narrow from midnight to 1:30 AM; expanded slightly after that RSI-9 is moving down from a high of 71.24 at 9:30 PM after making a bearish divergence; below 40 Stochastic (9, 1, 3): %K is crisscrossing %D down since 4:30 AM; bouncing off from zero at 6:15 AM Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Tuesday January 8. The volume was mostly lower  than previous day and also lower than 10-day average. Dow Jones Transportation Average traded in higher volume. Major indices are above 20-day EMA. All S&P were up for the day.

From Briefing.com:

The S&P 500 rose 1.0% on Tuesday, notching its third straight day of gains and its fifth in the last six sessions. The benchmark index did succumb to some early selling pressure, though, surrendering an early 1.2% gain. However, the wave of improved investor sentiment — and a buy-the-dip mentality — that has supported the stock market rally thus far in the new year lifted stocks from early lows.

The Dow Jones Industrial Average gained 1.1%, the Nasdaq Composite gained 1.1%, and the Russell 2000 gained 1.5%.

[…]

Buying interest was largely broad-based with 10 of the 11 S&P 500 sectors finishing with gains. The real estate (+1.8%), communication services (+1.6%), industrials (+1.4%), and utilities (+1.3%) groups outperformed the broader market.

[…]

The 2-yr Treasury note yield rose seven basis points to 2.59%, and the 10-yr Treasury note yield rose three basis points to 2.72%. The U.S. Dollar Index increased by 0.3% to 95.92.

[…]

• The NFIB Small Business Optimism Index for December decreased to 104.4 from the prior reading of 104.8 in November
• The November Job Openings and Labor Turnover Survey showed that job openings decreased to 6.888 million from a revised 7.131 million (from 7.079 million) in October
• Total outstanding consumer credit increased by $22.2 billion in November after increasing a downwardly revised $24.9 billion (from $25.4 billion) in October.
o The key takeaway from the report is that the healthy expansion in consumer credit is a good portent for consumer spending activity when matched with good feelings about job security and income 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	Cross-Over
Industrials	Down	SPY (X-Under)	SPY	Cross-Over
Finance	Down	SPY (X-Under)	SPY	Cross-Over
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