Directional Bias For The Day:
- S&P Futures are lower; moving down since 9:30 PM on Tuesday; moving sideway since 2:30 AM
- The odds are for a down day with elevated volatility – watch for break above 2800.00 for change of fortune
- Trade news influencing the sentiments; risk-off sentiments
- Key economic data due:
- Richmond Fed Manufacturing Index (est. 6; prev. 3) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly lower – Shanghai was up
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.229%, down from May 28 close of 2.268%;
- 30-years is at 2.085%, down from 2.115%
- 2-years yield is at 2.192%, down from 2.225%
- The 10-Year-&-2-Year spread is at 0.144, down from 0.153
- Critical support levels for S&P 500 are 2787.22, 2785.02 and 2773.82
- Critical resistance levels for S&P 500 are 2798.77, 280143 and 2812.11
- Key levels for eMini futures: break above 2792.25, the high of 7:00 AM and break above 2800.00, the high of 1:30 AM; and break below 2782.00, the low of 5:00 AM
- On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2801.25 and the index closed at 2802.39 – a spread of about -1.00 points; futures closed at 2805.00 for the day; the fair value is -3.75
- Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -19.25; Dow by -195 and NASDAQ by -64.00
Directional Bias Before Open
- Weekly: Uptrend under pressure
- Daily: Uptrend under pressure
- 120-Min: Down
- 30-Min: Down
- 15-Min: Down
- 6-Min: Down-Side
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 Tuesday, May 28 in mixed volume. Dow Jones Industrial Average, S&P 500, and Dow Jones Transportation Average traded in higher volume. NASDAQ Composite and Russell 2000 traded in lower volume. Major indices are at significant support levels. If the levels break there is a potential for deep decline.
The S&P 500 lost 0.8% on Tuesday, while U.S. Treasuries rallied, as investors continued to show little enthusiasm for risk assets. Tuesday’s decline wiped out an early gain for the benchmark index and sent it back near the 2800 level as losses accelerated into the close.
The Dow Jones Industrial Average (-0.9%), the Nasdaq Composite (-0.4%), and the Russell 2000 (-0.7%) also gave up early gains and finished near their session lows.
The S&P 500 consumer staples (-1.8%), utilities (-1.6%), and health care (-1.4%) sectors led the market lower. The Dow Jones Transportation Average (-1.3%) was another laggard, as investors remained concerned about a protracted trade war with China. The communication services sector (+0.2%) was the lone sector to finish higher.
Demand for U.S. Treasuries remained strong, sending yields even lower, amid the trade uncertainty and negative disposition in equities. The 2-yr yield declined four basis points to 2.12%, and the 10-yr yield declined six basis points to 2.27% — eight basis points below the yield on the 3-month bill. The U.S. Dollar Index advanced 0.3% to 97.93. WTI crude rose 0.8% to $59.11/bbl.
• The Conference Board’s Consumer Confidence Index increased to 134.1 in May (Briefing.com consensus 130.0) from 129.2 in April. The May reading is the highest level for the index since November 2018.
o The key takeaway from the report is that it shows consumer confidence has not been impacted yet by the increased trade tension between the U.S. and China, which includes an escalation in tariff rates on Chinese imports that could ultimately be passed along to the consumer.
• The FHFA Housing Price Index for March increased 0.1% (Briefing.com consensus 0.3%) following a revised increase of 0.4% in February (from 0.3%).
• The S&P Case-Shiller Home Price Index for March increased 2.7% (Briefing.com consensus 2.9%) following a 3.0% increase in February.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.