Directional Bias For The Day:
- S&P Futures are moving sideways
- Odds are for an up day with elevated volatility – watch for break below 2674.25 for change of fortunes
- Key economic data due:
- Employment Cost Index (0.7% vs. 0.8% est.; prev. 0.8%) at 8:30 AM
- Unemployment Claims (253K vs. 215K est.; prev. 199K) at 8:30 AM
- Chicago PMI (est. 61.5; prev65.4) at 9:45 AM
- New Home Sales (est. 569K; prev. 544K) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly higher – Sydney and Seoul were down
- European markets are mixed – Germany, Spain, Italy and STOXX 600 are down; U.K., France and Switzerland are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.678%, up from January 30 close of 2.695%;
- 30-years is at 3.027%, up from 3.053%
- 2-years yield is at 2.504%, down from 2.516%
- The 10-Year-&-2-Year spread is at 0.174, down from 0.179
- Critical support levels for S&P 500 are 2675.79, 2658.65 and 2648.34
- Critical resistance levels for S&P 500 are 2690.37, 2708.54 and 2730.90
- Key levels for eMini futures: break above 2690.25, the high of 3:00 AM and break below 2674.25, the low of 3:30 PM on Wednesday
- On Wednesday, at 4:00 PM, S&P future (January contract) closed at 2680.25 and the index closed at 2681.05 – a spread of about -0.75 points; futures closed at 2682.50 for the day; the fair value is -1.25
- Pre-NYSE session open, futures price action is mixed – at 7:45 AM, S&P 500 futures were up by +2.75; Dow down by -22; and NASDAQ by +37.50
Directional Bias Before Open
- Weekly: Down
- Daily: Bouncing off in a Downtrend
- 120-Min: Up-Side
- 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 Wednesday January 30 in higher volume. Indices gapped up at the open and then stayed up. They rose even higher following FOMC Press Conference at 2:30 after a brief pullback.
Major indices are either near or breaking above downtrend line from October 2018 highs. NASDAQ Composite and Russell 200 broke above their respective downtrend lines on January 18 and are staying above after a brief pullback to them. S&P 500, NYSE Composite and Wilshire 5000 Total Market index are breaking above their respective downtrend lines. Dow Jones Industrial Average is just below its downtrend line and the Dow Jones Transportation Average is much below its.
The S&P 500 began the day comfortably higher as Apple’s (AAPL 165.25, +10.57, +6.8%) better-than-feared earnings and Boeing’s (BA 387.72, +22.81, +6.3%) impressive report fueled broad-based buying interest. The benchmark index then added as much as 1.9% after the Federal Reserve provided some market-friendly commentary before finishing up 1.6%.
The Dow Jones Industrial Average gained 1.8%, the Nasdaq Composite gained 2.2%, and the Russell 2000 gained 1.1%.
All 11 S&P 500 sectors finished higher with information technology (+3.0%) and consumer discretionary (+2.2%) leading the advance.
The FOMC voted unanimously to keep the fed funds rate unchanged at a target range of 2.25% to 2.50%, as expected.
The Fed’s dovish-minded perspective sent U.S. Treasuries in the belly of the curve to session highs. Longer-dated Treasuries were less affected.
The 2-yr yield, which was up as much as two basis points, decreased four basis points to 2.53%. The 10-yr yield, which was up as much as two basis points, decreased two basis points to 2.70%. The U.S. Dollar Index also fell on the news, losing 0.4% to 95.43.
• The ADP National Employment Report showed an increase of 213,000 in January (Briefing.com consensus 170,000), and the December reading was revised to 263,000 (from 271,000).
• Pending Home Sales decreased 2.2% in December (Briefing.com consensus +0.7%). Today’s reading follows a revised decrease of 0.9% in November (from -0.7%).
• The weekly MBA Mortgage Applications Index decreased 3.0% following a 2.7% decline in the prior week.
- 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|