Directional Bias For The Day:
- S&P Futures are lower; moving down since 11:00 AM on Wednesday
- Odds are for a down day – watch for break above 2725.75 for change of fortune
- Key economic data due:
- Unemployment Claims (230K vs. 220K est.; prev. 253K) at 8:30 AM
Markets Around The World
- Markets in the East closed mixed – Tokyo, Mumbai and Seoul closed down; Sydney and Singapore closed up; Shanghai and Hong Kong were closed
- European markets are down
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.669%, down from February 6 close of 2.702%;
- 30-years is at 3.007%, down from 3.038%
- 2-years yield is at 2.500%, down from 2.529%
- The 10-Year-&-2-Year spread is at 0.169, down from 0.173
- Critical support levels for S&P 500 are 2724.03, 2717.15 and 2712.62
- Critical resistance levels for S&P 500 are 2733.00, 2738.98 and 2760.88
- Key levels for eMini futures: break above 2725.75, the high of 5:00 AM and break below 2710.00, the low of 6:30 AM
- On Wednesday, at 4:00 PM, S&P future (January contract) closed at 2728.50 and the index closed at 2731.61 – a spread of about -3.00 points; futures closed at 2729.50 for the day; the fair value is -1.00
- Pre-NYSE session open, futures price action is to the downside – at 7:45 AM, S&P 500 futures were down by -17.25; Dow by -149; and NASDAQ by -43.75
Directional Bias Before Open
- Weekly: Downtrend reversing
- Daily: Up
- 120-Min: Side-Down
- 30-Min: Down
- 15-Min: Down
- 6-Min: Down
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 lower on Wednesday February 6 in lower volume. The day’s range was small and most of the price action sideways. Dow Jones Industrial Average is above its 200-day SMA. Other major indices are below it.
The S&P 500 lost 0.2% on Wednesday in a lackluster trading session. The benchmark index traded with modest losses nearly the entire day with price action dictated by the underperformance of the entertainment software stocks, the outperformance of the semiconductor stocks, and an underlying sense that the market was due for a breather.
The Dow Jones Industrial Average lost 0.1%, the Nasdaq Composite lost 0.4%, and the Russell 2000 lost 0.2%. For the second day in a row, the S&P 500 stalled just in front of its 200-day moving average (2742), topping out at 2738.08.
The S&P 500 communication services (-1.5%), real estate (-0.8%), energy (-0.8%), and materials (-0.7%) sectors underperformed the broader market.
U.S. Treasuries ended the day near their unchanged marks. The 2-yr yield decreased one basis point to 2.53%, and the 10-yr yield remained unchanged at 2.70%. The U.S. Dollar Index increased 0.3% to 96.38. WTI crude rose 0.4% to $53.99/bbl.
• The trade deficit narrowed to $49.3 billion in November (Briefing.com consensus -$55.5) from a revised $55.7 billion (from -$55.5 billion) in November.
o The trade deficit narrowed, because imports fell more than exports, yet the key takeaway from the report is that both exports and imports were down in November from the prior month, which fits with a slower growth narrative.
- 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|