Directional Bias For The Day:
- S&P Futures are lower; mostly moving down since 2:00 PM on Tuesday; fresh leg down since 2:30 PM on Wednesday
- The odds are for a down day with elevated volatility – watch for break above 2841.00 for change of fortune
- Trade news influencing the sentiments; risk-off sentiments
- Key economic data due:
- Unemployment Claims (211K vs. 215K est.; prev. 212K) at 8:30 AM
- Flash Manufacturing PMI (est. 53.;; prev. 53.0) at 9:45 AM
- Flash Services PMI (est. 53.6; prev. 53.0) at 9:45 AM
- New Home Sales ( est. 678K; prev. 692K) at 10:00 AM
Markets Around The World
- Markets in the East closed lower
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.361%, down from May 21 close of 2.393%;
- 30-years is at 2.785%, down from 2.818%
- 2-years yield is at 2.192%, down from 2.225%
- The 10-Year-&-2-Year spread is at 0.169, up from 0.168
- Critical support levels for S&P 500 are 2831.29, 2820.08 and 2815.08
- Critical resistance levels for S&P 500 are 2851.11, 286318 and 2868.69
- Key levels for eMini futures: break above 2841.00, the high of 3:30 AM and break below 2825.25, the low of 6:00 AM
- On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2857.50 and the index closed at 2856.27 – a spread of about +1.25 points; futures closed at 2857.50 for the day; the fair value is +0.00
- Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -23.25; Dow by -230 and NASDAQ by -82.75
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend under pressure
- 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, May 22 in mixed volume. Dow Jones Industrial Average and NASDAQ Composite traded in lower volume. S&P 500, Russell 200 and Dow Jones Transportation Average traded in higher volume. The day’s range was small and most made small red doji like candles. Russell 2000 and DJT made relatively large red candle.
The stock market wavered with modest losses on Wednesday, leaving the S&P 500 down 0.3%, amid persisting trade uncertainty. The prevalence, and volatile nature, of trade headlines that have no clear end-date helped curb some of yesterday’s trade-related enthusiasm.
The Dow Jones Industrial Average lost 0.4%, the Nasdaq Composite lost 0.5%, and the Russell 2000 lost 0.9%.
Reports that the U.S. is considering blacklisting several other Chinese firms put a damper on Apple (AAPL 182.78, -3.82, -2.1%) and many of the stocks within the Philadelphia Semiconductor Index (-2.1%).
All of the S&P 500 cyclical sectors finished lower. The energy sector (-1.6%) led the decline amid lower oil prices ($61.40/bbl, -$1.67, -2.6%), which were pressured by the trade uncertainty and some bearish inventory data.
This uncertainty also fostered some defensive positioning in U.S. Treasuries and in the S&P 500 utilities (+0.8%), health care (+0.6%), consumer staples (+0.6%) and real estate (+0.4%) sectors.
The 2-yr yield declined two basis points to 2.22%, and the 10-yr yield declined three basis points to 2.39%. The U.S. Dollar Index finished little changed at 98.09.
• The Minutes from the May FOMC meeting showed that policymakers are comfortable with the current fed funds rate range while “a number of participants” saw a moderation in risk and uncertainties surrounding their outlooks for the year.
o The key takeaway is that the stock market has a reasonable assurance to think policy rates are going to remain quite low on a real and nominal basis. Low rates are supportive for risk assets like stocks.