Directional Bias For The Day:
- S&P Futures are higher;
- Near the upper bound of a symmetrical triangle
- The odds are for a sideways to an up day with elevated volatility – watch for break below 2881.25 for change of fortune
- Key economic data due:
- Unemployment Claims (209K vs. 215K est.; pre. 217K) at 8:15 AM
- Final Wholesale Inventories ( est. 0.2%; pre. 0.2%) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly higher – Singapore was down
- European markets are higher
- Crude Oil
- 10-yrs yield closed at 1.684%, down from August 6 close of 1.739%;
- 30-years is at 2.197%, down from 2.269%
- 2-years yield is at 1.605%, up from 1.597%
- The 10-Year-&-2-Year spread is at 0.079, down from 0.142
- Critical support levels for S&P 500 are 2877.09, 2861.34 and 2846.84
- Critical resistance levels for S&P 500 are 2892.17, 2898.07 and 2914.11
- Key levels for eMini futures: break above 2896.50, the high of 2:00 AM and break below 2881.25, the low of 4:00 AM
- On Wednesday, at 4:00 PM, S&P future closed at 2883.25 and the index closed at 2883.98 – a spread of about -0.75 points; futures closed at 2880.50 for the day; the fair value is +2.75
- Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +11.25; Dow by +89 and NASDAQ by +40.75
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: Uptrend Under Pressure
- 30-Min: Side
- 15-Min: 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 higher on Wednesday, August 7 in mixed volume. The indices gapped down at the open and then declined more before turning around and closing higher. Most made bullish engulfing candle, which was still within the red real body of Monday.
The stock market staged a big reversal on Wednesday in which the S&P 500 increased 0.1% after being down as much as 2.0% shortly after the open. A steep drop in U.S. Treasury yields contributed to the early sell-off, but selling pressure was abated soon after yields stabilized.
The Nasdaq Composite (+0.4%) also finished higher after beginning sharply lower, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.1%) finished just below their flat lines.
Central banks from New Zealand, India, and Thailand cut interest rates sharper than expected on Wednesday with New Zealand’s RBZN Governor indicating that rates may go negative. Negative rates around the world has been a phenomenon that has presumably increased interest in U.S. Treasuries.
The 2-yr yield finished three basis points lower at 1.58% after touching 1.53% at its low, and the 10-yr yield finished six basis points lower at 1.68% after touching 1.61% at its low. The U.S. Dollar Index finished flat at 97.62. Low rates and growth concerns continued to boost gold ($1505.9/oz, +$33.30, +2.3%), which at one point today provided investors a higher return than the S&P 500 this year.
• Consumer credit increased by $14.6 bln in June (Briefing.com consensus $16.5 bln) after increasing a revised $17.8 bln (from $17.1 bln) in May.
o The key takeaway from the report is that the June increase in consumer credit was driven entirely by growth in nonrevolving credit, like auto and student loans. This marks a return to a dynamic that was seen earlier this year.
• The weekly MBA Mortgage Applications Index increased 5.3% following a 1.4% decline in the prior week.