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