Directional Bias For The Day:
- S&P Futures are lower; mostly moving down since 2:00 PM on Tuesday; fresh leg down since 6:30 AM
- The odds are for a down to sideways day with elevated volatility – watch for break above 2865.75 for change of fortune
- Trade news influencing the sentiments; risk-off sentiments
- Key economic data due:
- FOMC Meeting Minutes at 2:00 PM
Markets Around The World
- Markets in the East closed mostly higher – Shanghai and Singapore were down
- European markets are mostly lower – U.K. is up
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.407%, down from May 20 close of 2.416%;
- 30-years is at 2.829%, down from 2.842%
- 2-years yield is at 2.229%, down from 2.254%
- The 10-Year-&-2-Year spread is at 0.178, up from 0.172
- Critical support levels for S&P 500 are 2854.02, 2842.06 and 2831.29
- Critical resistance levels for S&P 500 are 2863.37, 2868.69 and 2875.28
- Key levels for eMini futures: break above 2857.50, the low of 4:00 AM and break below 2851.25, the low of 8:00 AM
- On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2866.25 and the index closed at 2864.36 – a spread of about +2.00 points; futures closed at 2866.00 for the day; the fair value is +0.25
- Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -12.25; Dow by -93 and NASDAQ by -50.25
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend under pressure
- 120-Min: Side
- 30-Min: Side-Down
- 15-Min: Side-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 higher on Tuesday, May 21 in mostly lower volume. Dow Jones Transportation Average traded in higher volume. Major indices gapped up at the open and then stayed up for the rest of the day leaving the small doji like candle formed on the Monday as a breakaway island.
The S&P 500 rebounded 0.9% on Tuesday after the U.S. Department of Commerce granted Huawei a 90-day license to work with U.S. companies so it can service existing networks and mobile devices.
Like the S&P 500, the Dow Jones Industrial Average (+0.8%) and the Russell 2000 (+1.3%) recouped all of their losses from Monday. The tech-sensitive Nasdaq Composite (+1.1%) recouped most of its losses.
The trade-sensitive S&P 500 materials (+1.5%), information technology (+1.2%), and industrials (+1.2%) sectors outperformed the broader market. The consumer staples sector (-0.3%) was the lone sector to finish lower.
The Philadelphia Semiconductor Index advanced 2.1%, although it did drop 4.0% on Monday.
Earnings reports were retail-heavy on Tuesday. Home Depot (HD 191.45, +0.50, +0.3%) beat earnings estimates and issued upside full-year revenue guidance, but same store sales came up short of estimates. TJX Companies (TJX 53.26, +0.29, +0.6%) and AutoZone (AZO 1032.25, +54.42, +5.6%) advanced following their results, while Kohl’s (KSS 55.15, -7.76) fell 12.3% after disappointing investors.
U.S. Treasuries declined modestly, pushing yields slightly higher. The 2-yr yield increased two basis points to 2.24%, and the 10-yr yield increased one basis point to 2.43%. The U.S. Dollar Index increased 0.1% to 98.05. WTI crude declined 0.4% to $63.07/bbl.
• Existing home sales decreased 0.4% month-over-month in April to a seasonally-adjusted annual rate of 5.19 million (Briefing.com consensus 5.35 million) from an unrevised 5.21 million in March. Total sales were 4.4% lower than the same period a year ago.
o The key takeaway from the report is that overall sales activity remained light despite a drop in mortgage rates and a pickup in income, demonstrating that limited inventory and relatively high prices continue to impede existing home sales.