Directional Bias For The Day:
- S&P Futures are moving sideways to up since the NYSE close on Monday
- Odds are for an up day – watch for break below 2716.25 for change of fortune
- Key economic data due:
- ISM Non-Manufacturing PMI (est. 57.2; prev. 57.6) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly up – Tokyo was down; Shanghai, Hong Kong, Seoul and Singapore were closed
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.737%, up from February 4 close of 2.724%;
- 30-years is at 3.070%, up from 3.060%
- 2-years yield is at 2.549%, up from 2.545%
- The 10-Year-&-2-Year spread is at 0.188, up from 0.179
- Critical support levels for S&P 500 are 2717.15, 2712.62 and 2698.75
- Critical resistance levels for S&P 500 are 2730.90, 2760.88 and 2775.59
- Key levels for eMini futures: break above 2728.25, the high of 6:30 AM and break below 2716.25, the low of 7:30 PM on Monday
- On Monday, at 4:00 PM, S&P future (January contract) closed at 2723.75 and the index closed at 2724.87 – a spread of about -1.00 points; futures closed at 2721.25 for the day; the fair value is +2.50
- Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +5.25; Dow by +96; and NASDAQ by +24.50
Directional Bias Before Open
- Weekly: Downtrend reversing
- Daily: Up
- 120-Min: Up
- 30-Min: Up
- 15-Min: Up
- 6-Min: Up-Side
The trend and patterns on various time frames for S&P 500:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed higher on Monday February 4 in mixed volume. Dow Jones Industrial Average, S&P 500 and NASDAQ Composite traded in lower volume. Dow Jones Transportation Average and Russell 2000 traded in higher volume. DJIA is breaking above its downtrend line from October high. Now only DJT is below its downtrend line.
The S&P 500 gained 0.7% on Monday with shares of mega-cap companies leading the advance. The Dow Jones Industrial Average gained 0.7%, the Nasdaq Composite gained 1.2%, and the Russell 2000 gained 1.0%.
A mega-cap rally characterized the day’s trading action for most of the session with buying interest concentrated among a handful of names ahead of Alphabet’s (GOOG 1132.80, +22.05, +2.0%) earnings report after the close. A last minute swarm of broad-based buyers, though, pushed most sectors to finish near their best levels of the day.
The S&P 500 information technology (+1.6%), industrials (+1.3%), and communication services (+1.0%) sectors outperformed the broader market.
Shares of widely-held companies like Apple (AAPL 171.25, +4.73, +2.8%), Microsoft (MSFT 105.74, +2.96, +2.9%), Facebook (FB 169.25, +3.54, +2.1%), and Netflix (NFLX 351.34, +11.49, +3.4%) all rose more than 2.0%.
The health care (-0.3%) and materials (-0.2%) sectors underperformed the broader market and were the only sectors ending Monday with a loss.
U.S. Treasuries also finished the day with losses, pushing yields higher across the curve. The 2-yr yield and 10-yr yield increased three basis points each to 2.53% and 2.72%, respectively. The U.S. Dollar Index gained 0.3% to 95.84. WTI crude lost 1.2% to $54.61/bbl.
• Factory orders declined 0.6% in November (Briefing.com consensus +0.3%) on the heels of a 2.1% decline in October. Excluding transportation, orders were down 1.3% in November following a 0.2% increase in October.
o The key takeaway from the report is that it showed a drop in business investment in November, evidenced by the 0.6% decline in new orders for nondefense capital goods excluding aircraft. That raises the potential for a further decline in December since the November softness preceded the big market sell-off in December and the start of the partial government shutdown in January that were drags on business confidence.
- 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|
|Telecom||Down||XLT (Cross-Over)||SPY (Cross-Under)||Above|