Directional Bias For The Day:
- S&P Futures are higher; moving lower since 6:30 AM from a high of 2824.50;
- Fallen back into a narrow horizontal channel on 30-minute chart from which price broke out at 5:00 AM
- The odds are for a sideways to an up day with elevated volatility – watch for break below 2806.00 for change of fortune
- Key economic data due:
- ADP Non-Farm Employment Change (27K vs. 185K est.; prev. 271K ) at 8:15 AM
- Final Services PMI (est. 50.9; prev. 50.9) at 9:45 AM
- ISM Non-Manufacturing PMI ( est. 55.6; prev. 55.5) at 10:00 AM
- Beige Book at 2:00 PM
Markets Around The World
- Markets in the East closed mostly higher – Shanghai was down; Mumbai and Singapore were closed
- European markets are mostly higher – Italy is down
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.088%, down from June 4 close of 2.119%;
- 30-years is at 2.605%, down from 2.615%
- 2-years yield is at 1.795%, up from 1.832%
- The 10-Year-&-2-Year spread is at 0.293, up from 0.239
- Critical support levels for S&P 500 are 2791.09, 2784.70 and 2772.54
- Critical resistance levels for S&P 500 are 2814.79, 2820.19 and 2832.91
- Key levels for eMini futures: break above 2821.75, the high of 8:00 AM and break below 2806.00, the low of 2:30 AM
- On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2803.25 and the index closed at 2803.27 – a spread of about -0.00 points; futures closed at 2805.00 for the day; the fair value is -1.75
- Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +10.50; Dow by +100 and NASDAQ by +34.25
Directional Bias Before Open
- Weekly: Uptrend under pressure
- Daily: Uptrend under pressure
- 120-Min: Down-Up
- 30-Min: Side-Up
- 15-Min: Up-Side
- 6-Min: Up
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 sharply higher on Tuesday, June 4 in mostly lower volume. Dow Jones Transportation Average traded in higher volume. Indices gapped up at the open and then moved higher. Most made largest green candle since May 15 with almost no upper and lower shadows. Indices were in short term oversold region and ripe for a bounce.
The stock market had its best day since early January, boosted by gains across most sectors and by the prevailing view that the market was due for a bounce from short-term oversold conditions. Each of the major averages rose at least 2.0%, led by the 2.7% gain in the Nasdaq Composite, and the S&P 500 (+2.1%) climbed back above its 200-day moving average (2775).
Cyclical sectors led the rally with the S&P 500 information technology (+3.3%), materials (+2.8%), financials (+2.7%), consumer discretionary (+2.6%), and industrials (+2.4%) sectors all finishing with gains over 2.0%. The defensive-oriented utilities (unch) and real estate (-0.6%) sectors were left out of the rally.
Counter to the view that the stock market was oversold on a short-term basis, the Treasury market exhibited weakness on the view that it had gotten overbought on a short-term basis. The 2-yr yield increased five basis points to 1.88%, and the 10-yr yield increased four basis points to 2.12%. The U.S. Dollar Index declined 0.1% to 97.10. WTI crude increased 0.5% to $53.53/bbl.
• Factory orders declined 0.8% m/m in April (Briefing.com consensus -0.9%) following a downwardly revised 1.3% increase (from 1.9%) in March. Excluding transportation, orders increased 0.3%.
o The key takeaway from the report is the understanding that business investment was weak in April, evidenced by the 1.0% m/m decline in nondefense capital goods orders excluding aircraft.