Directional Bias For The Day:
- S&P Futures are higher; moving higher since 2:30 PM; breaking above an ascending triangle on 30-minute chart
- Daily and weekly trends are down
- Odds are for an up day with elevated volatility – watch for break below 2644.75 for change of fortunes
- Key economic data due:
- ADP Non-Farm Employment Change (est. 180K; prev. 271K) at 8:15 AM
- Pending Home Sales (est. 0.8%; prev. -0.7%) at 10:00 AM
- FOMC Statement; Fed Funds Rate at 2:00 PM
- FOMC Press Conference at 2:30 PM
Markets Around The World
- Markets in the East closed mixed – Shanghai, Tokyo, Mumbai and Singapore closed down; Hong Kong, Sydney and Seoul were up
- European markets are mixed – Germany, Spain and Switzerland are down; U.K., France, Italy and STOXX 600 are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.725%, up from January 29 close of 2.712%;
- 30-years is at 3.042%, up from 3.041%
- 2-years yield is at 2.585%, down from 2.595%
- The 10-Year-&-2-Year spread is at 0.144, up from 0.135
- Critical support levels for S&P 500 are 2634.21, 2631.05 and 2624.06
- Critical resistance levels for S&P 500 are 2650.93, 2658.75 and 2669.12
- Key levels for eMini futures: break above 2654.25, the high of 7:00 AM on January 28 and break below 2644.75, the low of 5:00 AM
- On Tuesday, at 4:00 PM, S&P future (January contract) closed at 2638.75 and the index closed at 2640.00 – a spread of about -1.25 points; futures closed at 2640.25 for the day; the fair value is -1.50
- Pre-NYSE session open, futures price action is to the upside – at 7:15 AM, S&P 500 futures were up by +10.00; Dow by +110; and NASDAQ by +61.25
Directional Bias Before Open
- Weekly: Down
- Daily: Downtrend Paused
- 120-Min: Side
- 30-Min: Side
- 15-Min: Side
- 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)||
Major U.S. indices closed mixed on Tuesday January 29 in lower volume. Dow Jones Industrial Average, Dow Jones Transportation Average and NUSE Composite closed higher. S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index closed down. The day’s range was small and most made small spinning top candlestick lines.
Wall Street closed on a mixed note on Tuesday, with the S&P 500 losing 0.2%, ahead of a big batch of earnings reports. The market has heard its share of guidance cuts during the Q4 earnings season so far, which presumably led investors to employ some caution in front of Apple’s (AAPL 154.68, -1.62, -1.0%) report after Tuesday’s close.
The blue-chip Dow Jones Industrial Average gained 0.2%, the tech-sensitive Nasdaq Composite lost 0.8%, and the small-cap Russell 2000 lost 0.1%.
The S&P 500 communication services (-1.1%), information technology (-1.0%), and consumer discretionary (-0.8%) sectors underperformed the broader market. Conversely, the industrials (+1.4%), materials (+1.1%), and real estate (+0.8%) sectors outperformed.
Dow component 3M (MMM 196.95, +3.75, +1.9%) for its part lowered its fiscal 2019 guidance, in part due to slowing segments in China. The stock outperformed, though, helped by an earnings beat and by the view that its guidance cut was better than feared.
Fellow Dow components Pfizer (PFE 40.77, +1.24, +3.1%) and Verizon (VZ 53.28, -1.79, -3.3%) also reported better-than-expected profit estimates and issued underwhelming guidance. Pfizer guided fiscal 2019 earnings and revenue below consensus, and Verizon issued mixed guidance for fiscal 2019.
U.S. Treasuries edged higher, pushing yields lower across the curve. The 2-yr yield decreased one basis point to 2.57%, and the 10-yr yield decreased three basis points to 2.71%. The U.S. Dollar Index gained 0.1% to 95.82. WTI crude rose 2.4% to $53.22/bbl.
• The Conference Board’s Consumer Confidence Index dropped to 120.2 in January (Briefing.com consensus 126.1) from a downwardly revised 126.6 (from 128.1) in December.
o The key takeaway from the report is that it showed the outlook among consumers was dampened by the volatility in financial markets and the government shutdown, which threatens to register in consumer spending data that would be a drag on first quarter GDP.
- 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|
|Industrials||Down||SPY (X-Under)||XLI (Cross-Over)||Cross-Over|
|Finance||Down||SPY (X-Under)||XLF (Cross-Over)||Cross-Over|
|Utility||Under Pressure||SPY (X-Under)||SPY||Below|
|Heath Care||Down||XLV||SPY (Cross-Under)||Below|
|Real Estate||Down||SPY (X-Under)||XLRE (Cross-Over)||Cross-Over|