Directional Bias For The Day:
- S&P Futures are lower;
- The odds are for a down day with elevated volatility – watch for break above 2907.00 for change of fortune
- Key economic data due:
- Import Prices (est. 0.0%; prev. -0.9%) at 8:30 AM
Markets Around The World
- Markets in the East closed up
- European markets are lower
- Crude Oil
- 10-yrs yield closed at 1.680%, up from August 12 close of 1.639%;
- 30-years is at 2.137%, up from 2.130%
- 2-years yield is at 1.673%, up from 1.588%
- The 10-Year-&-2-Year spread is at 0.007, down from 0.051
- Is at 20.09 up from August 13 close of 17.52; Above 5-day SMA 18.716
- Recent high was 24.81 on August 5; recent low was 11.69 on July 25
- Critical support levels for S&P 500 are 2889.81, 2877.05 and 2873.14
- Critical resistance levels for S&P 500 are 2907.58, 2917.02 and 2929.13
- Key levels for eMini futures: break above 2907.00, the high of 7:30 AM and break below 2875.75, the low of 9:30 AM on August 13
- On Tuesday, at 4:00 PM, S&P future closed at 2927.25 and the index closed at 2926.32 – a spread of about +1.00 points; futures closed at 2932.00 for the day; the fair value is -4.75
- Pre-NYSE session open, futures are lower – at 7:45 AM, S&P 500 futures were down by -39.50; Dow by -372 and NASDAQ by -11.75
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: Uptrend Under Pressure
- 30-Min: Down
- 15-Min: Down
- 6-Min: Down
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 13. The volume traded was higher than that on Monday but lower than 10-day average. Dow Jones Industrial Average, S&P 500, NASDAQ Composite and Dow Jones Transportation Average made bullish engulfing patterns. Russell 2000, NYSE Composite and Wilshire 5000 Total Market Index made red doji like patterns showing indecision.
U.S. stocks rallied on Tuesday after the White House announced that it will delay the 10% tariff rate for some items imported from China, including cell phones and laptops, until Dec. 15. Apple (AAPL 208.97, +8.49, +4.2%) led the broad-based advance and contributed to the solid gains in the S&P 500 (+1.5%), Dow Jones Industrial Average (+1.4%), and Nasdaq Composite (+2.0%). The Russell 2000 increased 1.1%.
Shorter-dated U.S. Treasuries sold off, driving yields higher in another curve-flattening trade. The 2-yr yield increased nine basis points to 1.67%, and the 10-yr yield increased four basis points to 1.68%. The general risk-on mood helped the market overlook the continued compression in yields. The U.S. Dollar Index advanced 0.5% to 97.82.
• Total CPI increased 0.3% m/m in July, as expected, while core CPI, which excludes food and energy, also increased 0.3% (Briefing.com consensus 0.2%) for the second straight month. Those readings left total CPI up 1.8% yr/yr, versus 1.6% in June, and core CPI up 2.2% yr/yr, versus 2.1% in June.
o The key takeaway from the report is that it muddles the monetary policy outlook. The year-over-year readings are not exactly “rate-cutting” material, but with everything else going on, the market will be left to conclude that another rate cut is likely since the Fed will want to ensure that everything else going on doesn’t lead to a caustic slide in inflation expectations.
• The NFIB Small Business Optimism Index for July increased to 104.7 from 103.3 in June.