Directional Bias For The Day:
- S&P Futures are lower;
- Double top formation on 30-minute chart; broke below the intermediate low of two highs; 61.8% extension target is near 2836.00 level
- The odds are for a down day with elevated volatility – watch for break above 2870.50 for change of fortune
- No key economic data due
Markets Around The World
- Markets in the East closed mixed – Shanghai, Tokyo, Mumbai and Seoul closed down; Hong Kong, Sydney and Singapore closed up
- European markets are higher
- Crude Oil
- 10-yrs yield closed at 1.739%, up from August 5 close of 1.735%;
- 30-years is at 2.269%, down from 2.295%
- 2-years yield is at 1.597%, up from 1.577%
- The 10-Year-&-2-Year spread is at 0.142, down from 0.158
- Critical support levels for S&P 500 are 2872.42, 2852.90 and 284742
- Critical resistance levels for S&P 500 are 2884.40, 2898.07 and 2914.11
- Key levels for eMini futures: break above 2875.75, the high of 8:00 AM and break below 2854.50, the low of 11:00 PM
- On Tuesday, at 4:00 PM, S&P future closed at 2881.50 and the index closed at 2881.18 – a spread of about -0.25 points; futures closed at 2876.00 for the day; the fair value is +5.50
- Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -15.00; Dow by -143 and NASDAQ by -33.75
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: Uptrend Under Pressure
- 30-Min: Down-Side
- 15-Min: Side
- 6-Min: Up-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 higher on Tuesday, August 6 in higher volume. The indices gapped up at the open and then closed higher. The real body for most indices were large green candles that still made harami formation.
U.S. stocks rebounded from their worst day of the year on Tuesday, as investors appeared comfortable in buying the dip after China took steps to stabilize its currency. The major indices closed near session highs with the S&P 500 advancing 1.3%.
The Dow Jones Industrial Average increased 1.2%, the Nasdaq Composite increased 1.4%, and the Russell 2000 increased 1.0%.
Tuesday’s gains weren’t enough to completely undue yesterday’s sell-off, but when contrasting the results versus the capitulation-like mood in the futures market last evening, today did seem like a good day. At one point last night, the S&P 500 was indicated for more than a 2% drop at the open after the Treasury Department labeled China a currency manipulator.
Nine of the 11 S&P 500 sectors finished higher by at least 1.0%. The information technology (+1.6%), financials (+1.5%), and industrials (+1.5%) sectors led the advance, while the energy sector (-0.1%) was the lone holdout as oil prices ($53.84/bbl, -$0.80, -1.5%) continued to decline.
While equities rallied, the U.S. Treasury yield curve continued to flatten, which reflected ongoing concerns about the economic outlook. The 2-yr yield increased three basis points to 1.61%, and the 10-yr yield finished flat at 1.74%. The U.S. Dollar Index increased 0.1% to 97.62.
Tuesday’s economic data was limited to the JOLTS — Job Openings report for June, which showed job openings increase to 7.348 million from a revised 7.268 million in May (from 7.323).