Directional Bias For The Day:
- S&P Futures are lower; moving down since 2:30 AM after a bounce; at the same level that was reached after the decline following the NYSE close on Monday
- The odds are for a down day with elevated volatility though with a decent chance of moving sideways to up from pre-NYSE levels – watch for break above 2917.75, the low of the gap, for change of fortune
- Key economic data due:
- JOLTS Job Openings (est. 7.35M; prev. 7.09M) at 10:00 AM
- IBD/TIPP Economic Optimism (est. 54.5; prev. 54.2) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly up – Mumbai and Seoul were down; Tokyo was closed for trading
- European markets are mostly lower – Italy is higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 2.500%, down from May 3 close of 2.531%;
- 30-years is at 2.907%, down from 2.926%
- 2-years yield is at 2.291%, down from 2.339%
- The 10-Year-&-2-Year spread is at 0.209, up from 0.192
- Critical support levels for S&P 500 are 2914.29, 2898.21 and 2891.90
- Critical resistance levels for S&P 500 are 2931.45, 2937.32 and 2942.45
- Key levels for eMini futures: break above 2930.50, the high of 2:30 AM and break below 2908.25, the low of 8:00 AM
- On Monday, at 4:00 PM, S&P future (June contract) closed at 2934.00 and the index closed at 2932.47 – a spread of about +1.50 points; futures closed at 2932.50 for the day; the fair value is +1.50
- Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -18.25; Dow by -156 and NASDAQ by -59.00
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend
- 120-Min: Down
- 30-Min: Down-Side
- 15-Min: Down-Side
- 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 mostly closed lower on Monday, May 6 in mostly higher volume. Russell 2000 closed up and Dow Jones Transportation Average traded in lower volume. The indices gapped down significantly at the open and then for most of the day traded higher.
The S&P 500 declined 0.5% on Monday, although it had dropped as much as 1.6% after threats from President Trump to increase China tariffs fueled concerns about a trade deal. Investors, however, regrouped to buy the dip, lifting stocks off their lows on hopes that a trade deal will still be secured.
The Dow Jones Industrial Average lost 0.3%, and the Nasdaq Composite lost 0.5%. The domestically-oriented Russell 2000 managed to finish higher by 0.1%.
The worst levels in the U.S., however, came at the beginning of the day as all 11 S&P 500 sectors traded lower. Buying interest throughout the day contributed to a steady advance off early lows.
There is increased uncertainty, though, which contributed to the underperformance of the S&P 500 materials (-1.4%), industrials (-1.0%), and information technology (-0.8%) sectors. These sectors contain many companies with Chinese exposure. The health care sector (+0.6%) was the lone group to finish higher.
A turnaround in oil prices ($62.31/bbl, +0.38, +0.6%) amid rising tensions between the U.S. and Iran also provided some support for the energy space.
U.S. Treasuries finished higher but lost steam as equities regained buying interest. The 2-yr yield declined one basis point to 2.31%, and the 10-yr yield declined three basis points to 2.50%. The U.S. Dollar Index finished little changed at 97.53.