Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for an up day with elevated volatility – watch for break below 2863.50 for change of fortune
- The 61.8% Fibonacci retracement of the big decline on Friday – from 2936.50 to 2810.25 – is achieved near 2888.00; the 78.6% Fibonacci retracement is near 2909.00 after a resistance level near 2901.00
- Key economic data due:
- Durable Good ( 2.1% vs. 1.4% est.; prev. 1.9%) at 8:30 AM
- Core Durable Goods (-0.4% vs. 0.2% est.; prev. 1.0% ) at 8:30 AM
- 9:00 AM Update:
- The sentiments have turned negative following China’s plans for retaliatory tariffs on U.S. goods;
- The low of Thursday, 2904.25, has been breached though futures have bounced up from that level but it has become the new critical support level;
- The support of 2899.60, the low of August 20, has become relevant for the index; next relevant level following that is 2882.60
- The bias for the day is now decidedly down
Markets Around The World
- Markets in the East closed mostly down – Mumbai are up
- European markets are mixed – Germany, France, Spain and Italy are up; U.K., Switzerland and STOXX 600 are down
- Crude Oil
- 10-yrs yield closed at 1.528%, down from August 22 close of 1.610%;
- 30-years is at 2.020%, down from 2.102%
- 2-years yield is at 1.527%, down from 1.622%
- The 10-Year-&-2-Year spread is at 0.001 up from -0.012
- Is at 19.90 up from August 23 close of 19.87 but below its open; Above 5-day SMA 17.95
- Recent high was 24.81 on August 5; recent low was 11.69 on July 25
- Critical support levels for S&P 500 are 2857.95, 2848.45 and 2834.97
- Critical resistance levels for S&P 500 are 2876.49, 2890.90 and 2901.70
- Key levels for eMini futures: break above 2888.50, the high of 5:30 AM and break below 2863.50, the low of 5:30 AM
- On Friday, at 4:00 PM, S&P future closed at 2847.75 and the index closed at 2847.11 – a spread of about +0.50 points; futures closed at 2855.50 for the day; the fair value is -7.75
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +18.50; Dow by +221 and NASDAQ by +56.50
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: Uptrend Under Pressure
- 30-Min: Up-Side
- 15-Min: Up-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 down on Friday, August 23 in higher volume, which was also higher than 10-day average. For the week major indices closed down in lower volume. All S&P sectors except Consumer Discretionary and Utility were down for the week.
The stock market sold off on Friday after President Trump ordered companies to find an alternative to China in response to Beijing announcing retaliatory tariffs against the U.S. The S&P 500 (-2.6%) and Dow Jones Industrial Average (-2.4%) lost around 2.5%, while the Nasdaq Composite (-3.0%) and Russell 2000 (-3.1%) lost at least 3.0%.
A steady broad-based retreat transpired during the day amid worries that escalated trade tensions will exacerbate slowing global growth and, by extension, affect corporate earnings. All 11 S&P 500 sectors finished in negative territory, which saw the energy (-3.4%) and information technology (-3.3%) sectors losing over 3%. The utilities sector (-1.1%) declined the least.
The 2-yr yield dropped seven basis points to 1.53%, and the 10-yr yield dropped eight basis points to 1.53%. The U.S. Dollar Index fell 0.5% to 97.73. WTI crude fell 2.0%, or $1.12, to $54.16/bbl.
• New home sales declined 12.8% m/m to a seasonally adjusted annual rate of 635,000 (Briefing.com consensus 645,000) from an upwardly revised 728,000 (from 646,000) in June. New home sales were up 4.3% yr/yr.
o The key takeaway from the report is that there was a big upward revision for June, yet there was no follow-through in July despite low mortgage rates and lower median sales prices. Sales were down big in three of the four regions and the total number of new homes sold was still below the originally reported 646,000 increase for June.