Directional Bias For The Day:
- S&P Futures are higher but have recovered only 20% of Monday’s decline
- The odds are for an up day with elevated volatility – watch for break below 2831.50 for change of fortune
- Key economic data due:
- JOLTS Job Openings (est. 7.34M; prev. 7.2M) at 10:00 AM
- IBD/TIPP Economic Optimism (est. 54.6; prev. 56.6)
Markets Around The World
- Markets in the East closed mostly lower – Mumbai was up
- European markets are higher
- Crude Oil
- 10-yrs yield closed at 1.735%, down from August 2 close of 1.855%;
- 30-years is at 2.295%, down from 2.392%
- 2-years yield is at 1.577%, down from 1.713%
- The 10-Year-&-2-Year spread is at 0.158, up from 0.142
- Critical support levels for S&P 500 are 2822.12, 2915.32 and 2800.92
- Critical resistance levels for S&P 500 are 2852.09, 2859.51 and 2877.43
- Key levels for eMini futures: break above 2865.00, the high of 7:30 AM and break below 2831.50, the low of 0:30 AM
- On Monday, at 4:00 PM, S&P future closed at 2844.25 and the index closed at 2844.74 – a spread of about 0.50 points; futures closed at 2830.00 for the day; the fair value is +14.75
- Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +29.25; Dow by +276 and NASDAQ by +90.00
Directional Bias Before Open
- Weekly: Uptrend resumed
- Daily: Uptrend Under Pressure
- 30-Min: Down-Side
- 15-Min: Down-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)||
The stock market had its worst day of 2019 with each of the major U.S. indices losing around 3% on Monday. Trade and growth concerns rattled capital markets after China devalued the yuan to its weakest level against the dollar since 2008. Broad-based selling left the S&P 500 down 3.0% for the day.
The Dow Jones Industrial Average fell 2.9%, the Nasdaq Composite fell 3.5%, and the Russell 2000 fell 3.0%.
On a related note, all of Germany’s sovereign debt yielded negative rates for the first time on Monday.
The 2-yr yield dropped 13 basis points to 1.58%, and the 10-yr yield dropped 12 basis points to 1.74%. The U.S. Dollar Index fell 0.5% to 97.58. WTI crude lost 2.0% to $54.64/bbl.
Separately, gold futures settled 1.2% higher at $1467.20/oz, further helped by weakness in the dollar and declining U.S. Treasury yields. Shares of Newmont Goldcorp (NEM 37.42, +0.51) advanced 1.4%.
• The ISM Non-Manufacturing Index decreased to 53.7% in July (Briefing.com consensus 55.4) from 55.1% in June. The dividing line between expansion and contraction is 50.0%.
o The key takeaway from the report is that it shows a continuation of a decelerating trend that has been in place since late 2018. The Non-Manufacturing Index is at its lowest level in almost three years.
Looking ahead, investors will receive the JOLTS – Job Openings report for June on Tuesday.