Directional Bias For The Day:
- S&P Futures are not much changed from 9:3-0 AM on Tuesday; moving up since 4:30 from 2724.50
- Odds are for sideways to an up day – watch for break below 2724.50 for change of fortune
- No Key economic data due:
Markets Around The World
- Markets in the East closed up – Shanghai, Hong Kong, Seoul and Singapore were closed
- European markets are mixed – Germany, U.K., and France are down; Spain, Italy, Switzerland and STOXX-600 are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.680%, down from February 5 close of 2.686%;
- 30-years is at 3.018%, down from 3.019%
- 2-years yield is at 2.549%, down from 2.545%
- The 10-Year-&-2-Year spread is at 0.164, up from 0.150
- Critical support levels for S&P 500 are 2724.03, 2717.15 and 2712.62
- Critical resistance levels for S&P 500 are 2738.98, 2760.88 and 2775.59
- Key levels for eMini futures: break above 2735.00, the high of 9:00 PM on Tuesday and break below 2724.50, the low of 4:30 AM
- On Tuesday, at 4:00 PM, S&P future (January contract) closed at 2735.00 and the index closed at 2737.70 – a spread of about -2.75 points; futures closed at 2731.00 for the day; the fair value is +4.00
- Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +0.75; Dow by +9; and NASDAQ by +14.00
Directional Bias Before Open
- Weekly: Downtrend reversing
- Daily: Up
- 120-Min: Up-Side
- 30-Min: Side-Down
- 15-Min: Side-Down
- 6-Min: 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 Tuesday February 5 in mostly higher volume. Russell 2000 traded in lower volume. DJIA has breaked above its downtrend line from October high. Now only DJT is below its downtrend line.
The S&P 500 gained 0.5% on Tuesday, although it ran into some resistance at its 200-day moving average (2741.76) during the session. The Dow Jones Industrial Average gained 0.7%, the Nasdaq Composite gained 0.7%, and the Russell 2000 gained 0.2%.
The S&P 500 information technology (+0.9%) and consumer discretionary (+1.0%) sectors were consistent leaders throughout the session, which contributed to an early risk-on trading mentality that helped lift the benchmark index near its 200-day moving average.
U.S. Treasuries edged higher, pushing yields lower across the curve. The 2-yr yield decreased one basis point to 2.52%, and the 10-yr yield decreased two basis points to 2.70%. The U.S. Dollar Index increased 0.2% to 96.03. WTI crude lost 1.6% to $53.75/bbl.
• The ISM Non-Manufacturing Index checked in at 56.7% for January (Briefing.com consensus 57.0%), down from an upwardly revised 58.0% (from 57.6%) in December. The dividing line between expansion and contraction is 50.0%. Accordingly, the non-manufacturing sector expanded in January, but at a slower pace.
o The key takeaway from the report is that non-manufacturing sector activity slowed in the face of concerns about the partial government shutdown, yet respondents reportedly remain mostly optimistic about overall business conditions. According to the ISM, the past relationship between the non-manufacturing index and the overall economy indicates the January reading corresponds to a 2.8% increase in real GDP on an annualized basis.
- 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|