Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for an up to sideways day – watch for break below 2918.50 for change of fortune
- Key economic data due:
- Unemployment Claims ( 217K est. ; prev. 220K) at 8:30 AM
- Flash Manufacturing PMI ( 50.5 est.; prev. 50.4) at 9:45 AM
- Flash Services PMI ( 52.9 est. ; prev. 53.0 ) at 9:45 AM
- CB Leading Index (0.2% est.; prev. 0.2%) at 10:00 AM
Markets Around The World
- Markets in the East were mixed – Shanghai, Tokyo, Sydney and Singapore were up; Hong Kong, Mumbai and Seoul were down
- European markets are mixed – Germany, Spain and Italy were up; U.K., France, Switzerland and STOXX 600 are down
- Crude Oil
- 10-yrs yield closed at 1.577%, up from August 20 close of 1.561%;
- 30-years is at 2.053%, up from 2.044%
- 2-years yield is at 1.578%, up from 1.508%
- The 10-Year-&-2-Year spread is at -0.001 down from 0.053
- Is at 15.81 up from August 21 close of 15.80 ; declining since August 15; below 5-day SMA 16.89
- Recent high was 24.81 on August 5; recent low was 11.69 on July 25
- Critical support levels for S&P 500 are 2918.26, 2909.75 and 2899.60
- Critical resistance levels for S&P 500 are 2928.73, 2943.31 and 2964.45
- Key levels for eMini futures: break above 2935.50, the high of 3:30 AM and break below 2918.50, the low of 5:30 AM
- On Wednesday, at 4:00 PM, S&P future closed at 2924.75 and the index closed at 2924.43 – a spread of about +0.25 points; futures closed at 2929.25 for the day; the fair value is -4.50
- Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +3.75; Dow by +41 and NASDAQ by +10.25
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: Uptrend Under Pressure
- 30-Min: Up-Side
- 15-Min: Up-Side
- 6-Min: Up-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 Wednesday, August 21. Volume traded was mixed though lower than the 10-day average. S&P 500, Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume. NASDAQ Composite and Russell 2000 traded in lower volume.
The S&P 500 increased 0.8% on Wednesday in a broad-based advance. Upbeat results and reassuring guidance from Target (TGT 103.00, +17.47, +20.4%) and Lowe’s (LOW 108.00, +10.13, +10.4%) reinforced the notion that the U.S. consumer remains in good shape, while investors parsed the FOMC minutes from the July meeting.
The Dow Jones Industrial Average increased 0.9%, the Nasdaq Composite increased 0.9%, and the Russell 2000 increased 0.8%.
All 11 S&P 500 sectors finished in positive territory, with the consumer discretionary (+1.8%) and information technology (+1.2%) sectors gaining over 1.0%. The consumer staples (+0.3%) and communication services (+0.4%) sectors rose modestly.
Price action was relatively muted leading up to the release of the FOMC Minutes, which had a noticeable effect on the U.S. Treasury market.
The 2-yr yield increased six basis points to 1.57%, and the 10-yr yield increased two basis points to 1.58%. At one point before the close, the 2s10s spread briefly inverted again. The U.S. Dollar Index increased 0.1% to 98.29. WTI crude declined 0.9%, or $0.53, to $55.65/bbl.
• Existing home sales increased 2.5% month-over-month in July to a seasonally-adjusted annual rate of 5.42 million (Briefing.com consensus 5.40 million) from an upwardly revised 5.29 million (from 5.27 million) in June. Total sales were 0.6% higher than the same period a year ago.
o The key takeaway from the report is that the inventory of existing homes for sale remains tight. That will continue to support high prices, which in turn makes the persistence of low mortgage rates extremely important as a driver of existing home sales activity.
• The weekly MBA Mortgage Applications Index declined 0.9% following a 21.7% spike in the prior week.