Directional Bias For The Day:
- S&P Futures are moving sideways
- Odds are for a sideways to up day – watch for break above 2709.25 and below 2698.00 for clarity
- No key economic data due
Markets Around The World
- Markets in the East closed mostly up – Singapore closed down; Shanghai and Seoul were closed
- European markets are mostly lower – U.K. and Switzerland are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.715%, up from February 1 close of 2.707%;
- 30-years is at 3.053%, up from 3.048%
- 2-years yield is at 2.528%, up from 2.496%
- The 10-Year-&-2-Year spread is at 0.187, down from 0.211
- Critical support levels for S&P 500 are 2696.88, 2693.09 and 2675.79
- Critical resistance levels for S&P 500 are 2715.00, 2721.37 and 2730.90
- Key levels for eMini futures: break above 2709.25, the high of 8:00 PM on Sunday and break below 2698.00, the low of 6:00 PM on Sunday
- On Friday, at 4:00 PM, S&P future (January contract) closed at 2704.50 and the index closed at 2706.53 – a spread of about -2.00 points; futures closed at 2704.25 for the day; the fair value is +0.25
- Pre-NYSE session open, futures price action is lower – at 8:45 AM, S&P 500 futures were down by -2.00; Dow by -13; and NASDAQ by -6.75
Directional Bias Before Open
- Weekly: Downtrend reversing
- Daily: Up
- 120-Min: Up-Side
- 30-Min: Up-Side
- 15-Min: Side
- 6-Min: Down
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)||
For the week, the major indices closed higher and in mostly higher volume from the shorter week before it. Dow Jones Transportation Average traded in lower volume. All S&P sectors closed higher for the week.
The S&P 500 overcame a slow start to the week to finish higher by 1.6% with earnings coming in better than feared and a dovish-minded Federal Reserve easing the market. In the process, the benchmark index also notched its best January since 1987.
The Dow Jones Industrial Average gained 1.3%, the Nasdaq Composite gained 1.4%, and the Russell 2000 gained 1.3%.
The S&P 500 energy (+3.2%), real estate (+2.9%), consumer staples (+2.9%), and industrial (+2.6%) sectors led this week’s advance. On the other hand, the consumer discretionary (-0.1%), financials (+0.1%), and materials (+0.8%) sectors underperformed.
Regarding earnings, Dow components Apple (AAPL), Boeing (BA), 3M (MMM), Pfizer (PFE), Exxon Mobil (XOM), Chevron (CVX), and Merck (MRK) pleased investors with their results. On the other hand, Caterpillar (CAT), Microsoft (MSFT), Visa (V), DowDuPont (DWDP), McDonald’s (MCD), and Verizon (VZ) underwhelmed.
U.S. Treasuries saw increased buying interest following Wednesday’s FOMC decision and Fed Chair Powell’s press conference. Treasuries pulled back on Friday, though, after a stronger-than-expected Employment Situation Report for January, which showed that nonfarm payrolls increased by 304,000 (Briefing.com consensus 160,000).
The 2-yr yield finished the week down 11 basis points to 2.50%, and the 10-yr yield fell nine basis points to 2.69%. The U.S. Dollar Index fell 0.2% to 95.66. WTI crude rose 3.0% to $55.28/bbl.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – January)||Relative Strength (February)||%K vs. %D (January)|
|Consumer Discretionary||Down||XLY||SPY (Cross-Under)||Above|
|Consumer Staples||Down||SPY (Cross-Under)||SPY||Cross-Over|
|Utility||Under Pressure||SPY (X-Under)||SPY||Cross-Over|
|Heath Care||Down||SPY (Cross-Under)||SPY||Cross-Over|
|Real Estate||Down||XLRE (Cross-Over)||XLRE||Above|