Directional Bias For The Day:
- S&P Futures are higher; moving mostly sideways to up since 9:15 PM on Sunday
- Odds are for an up day with elevated volatility – watch for break below 2748.25 for change of fortune
- Key economic data due:
- Core Retail Sales (0.9% vs. 0.4% est.; prev. -2.1%) at 8:30 AM
- Retail Sales (0.2% vs. 0.0% est.; prev. -1.6% ) at 8:30 AM
- Ethiopian Air’s Boeing 737 air-crash in weighing negatively on DJIA and the good Retail Sales numbers are buoying the rest of the market
Markets Around The World
- Markets in the East closed mostly up – Sydney and Singapore were down
- European markets are mostly higher – Spain is down
- Dollar index
- Crude Oil
- Cotton (Unch.)
- 10-yrs yield is at 2.639%, up from March 8 close of 2.625%;
- 30-years is at 3.026%, up from 3.009%
- 2-years yield is at 2.479%, down from 2.491%
- The 10-Year-&-2-Year spread is at 0.159, up from 0.153
- Critical support levels for S&P 500 are 2731.03, 2723.16 and 2703.79
- Critical resistance levels for S&P 500 are 2757.70, 2761.02 and 267.25
- Key levels for eMini futures: break above 2755.25, the high of 8:30 AM and break below 2747.00, the low of 4:30 AM
- On Friday, at 4:00 PM, S&P future (June contract) closed at 2748.00 and the index closed at 2743.07 – a spread of about +5.00 points; futures closed at 2752.00 for the day; the fair value is -4.00
- Pre-NYSE session open, futures price action is mixed – at 9:00 AM, S&P 500 futures were up by +6.25; Dow down by -197; and NASDAQ up by +29.75
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Up Under Pressure
- 120-Min: Down-Up
- 30-Min: Down-Up
- 15-Min: Side-Up
- 6-Min: Up
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 Friday March 8 in lower volume. However, the indices reversed course midday after testing morning’s low and mostly closed above their opens, which were gapped down. Most made hammer or doji like candlestick formations.
For the week, major U.S. indices closed lower in mostly higher volume. Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume during the week. Only Utilities and Real Estate were up for the week.
The S&P 500 lost 2.2% this week, as concerns about global growth underpinned a risk-off mindset. With few catalysts to justify further gains, and a confluence of discouraging data, news, and technical drivers, the market succumbed to profit-taking interest after its strong start to the year.
The Dow Jones Industrial Average lost 2.2%, the Nasdaq Composite lost 2.5%, and the Russell 2000 lost 4.3%.
Nine of the 11 S&P 500 sectors finished lower, led by the energy (-3.9%), health care (-3.9%), and industrial (-2.9%) sectors. Conversely, the real estate (+0.5%) and utilities (+0.7%) sectors were the lone groups to finish higher.
The leading narrative for the market this week was that global growth is slowing and that the market got ahead of itself pricing in economic prospects.
Major developments reinforcing this belief included (1) a surprisingly weak U.S. nonfarm payroll figure, which grew by just 20,000 (Briefing.com consensus 173,000); (2) the European Central Bank (ECB) issuing a dovish-minded policy stance; (3) 2019 GDP growth forecast cuts from the OECD, ECB, and China; and (4) slight-to-moderate growth for 10 of the 12 Fed districts, indicated in the Fed’s Beige Book for March.[…]
There were some technical drivers in play, too. The S&P 500’s inability to sustain a retest of its November high and stay above the 2800 level exacerbated selling efforts that sent the benchmark index below its 200-day moving average. The Nasdaq Composite, Russell 2000, and Dow Jones Transportation Average also fell below their 200-day moving averages.
The U.S. Treasury market exhibited a flight-to-safety trade, which drove yields notably lower after making notable moves higher in the prior week.
The 2-yr yield dropped 11 basis points to 2.44%, and the 10-yr yield dropped 13 basis points to 2.63%. The U.S. Dollar Index Index rose 0.9% to 97.36. WTI crude lost 0.6% to $56.14/bbl.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – February)||Relative Strength (March)||%K vs. %D (March)|
|Consumer Discretionary||Down||SPY (Cross-Under)||XLY (Cross-Over)||Cross-Under|
|Utility||Under Pressure||SPY||XLU (Cross-Over)||Above|
|Real Estate||Down||SPY (Cross-Under)||XLRE (Cross-Over)||Cross-Under|