Directional Bias For The Day:
- S&P Futures are higher; moving up since 12:30 PM on Wednesday
- The odds are for an up to sideways day with elevated volatility – watch for break below 2785.00 for change of fortune
- Key economic data due:
- Prelim GDP (3.1% vs. 3.1% est.; prev. 3.2%) at 8:30 AM
- Prelim GDP Price Index (0.8% vs. 0.9% est.; prev. 0.9%) at 8:30 AM
- Prelim Wholesale Inventories (0.7% vs. 0.2% est.; prev. -0.1%) at 8:30 AM
- Good Trade Balance (-72.1B vs. -72.0B est.; prev. -71.9B) at 8:30 AM
- Unemployment Claims (215K vs. 216K est.; prev. 212K ) at 8:30 AM
- Pending Home Sales (est. 0.9% ; prev. 3.8% ) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly lower – Mumbai and Seoul were up
- European markets are mostly higher – Italy is lower and Switzerland is closed
- Dollar index
- Crude Oil
- Sugar (Unch.)
- 10-yrs yield is at 2.248%, up from May 29 close of 2.236%;
- 30-years is at 2.673%, unchanged
- 2-years yield is at 2.101%, down from 2.117%
- The 10-Year-&-2-Year spread is at 0.149, up from 0.119
- Critical support levels for S&P 500 are 2768.85, 2766.06 and 2747.61
- Critical resistance levels for S&P 500 are 2787.19, 2792.03 and 2802.06
- Key levels for eMini futures: break above 2793.00, the high of 3:30 AM and break below 2785.00, the low of 8:00 AM
- On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2782.75 and the index closed at 2783.02 – a spread of about -0.25 points; futures closed at 2780.00 for the day; the fair value is +2.75
- Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +10.25; Dow by +60 and NASDAQ by +30.75
Directional Bias Before Open
- Weekly: Uptrend under pressure
- Daily: Uptrend under pressure
- 120-Min: Down-Side
- 30-Min: Down-Side
- 15-Min: Down-Side
- 6-Min: 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 Wednesday, May 29 in mixed volume. Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume. S&P 500, NASDAQ Composite and Russell 2000 traded in higher volume. Major indices gapped down at the open breaking significant support levels.
The S&P 500 was down as much as 1.3% on Wednesday amid trade and growth concerns, while the advance in U.S. Treasuries helped widen a key inversion within the yield curve. A rebound in the last hour of action, however, helped the benchmark index finish lower by 0.7% and reclaim its 200-day moving average (2776) after falling below the key technical level during the day.
The Dow Jones Industrial Average (-0.9%), the Nasdaq Composite (-0.8%), and the Russell 2000 (-0.9%) also finished off their session lows.
No S&P 500 sector finished higher, but the materials (-0.1%) and financials (-0.1%) sectors did finish just below their unchanged marks. The utilities (-1.3%) and real estate (-1.2%) sectors underperformed.
At one point during the day, the 3-month yield was 14 basis points higher than the 10-yr yield, which was its biggest difference since the financial crisis and helped feed into the persisting growth concerns. This term spread, according to research from the Federal Reserve Bank of San Francisco, is the most reliable predictor of a recession among the different term spreads.
Demand for U.S. Treasuries did lose traction during the afternoon, though, bringing yields slightly higher from session lows. The 2-yr yield finished four basis points lower at 2.08%, and the 10-yr yield finished three basis points lower at 2.23%. The U.S. Dollar Index increased 0.2% to 98.16. WTI crude declined 0.5% to $58.84/bbl.