Directional Bias For The Day:
- S&P Futures are higher; bouncing off oversold levels
- The odds are for an up to sideways day with elevated volatility; watch for break below 3220.25 for change of fortune
- Key economic data due:
- HPI ( 0.6% vs. 0.4% est.; prev. 0.2% ) at 9:00 AM
- S&P/CS Composite-20 HPI ( 2.85% vs. 2.8% est.; prev. 2.6%) at 9:00 AM
- CB Consumer Confidence ( est. 132.6 ; prev. 131.6) at 10:00 AM
- Richmond Fed Manufacturing Index ( est. 10; prev. 10) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 225.82, 3214.65 and 3205.38
- Critical resistance levels for S&P 500 are 3253.58, 3259.81 and 3280.61
- Key levels for eMini futures: break above 3259.50, the high of 8:30 PM and break below 3220.25, the low of 5:30 AM
- On Monday, at 4:00 PM, S&P future (March 2020) closed at 3225.50 and the index closed at 3225.89 – a spread of about -0.50 points; futures closed at 3226.25 for the day; the fair value is -1.00
- Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +12.75; Dow by +133 and NASDAQ by +67.75
Markets Around The World
- Markets in the East closed mixed – Shanghai, Tokyo, Sydney and Mumbai closed lower; Hong Kong, Seoul and Singapore closed higher;
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.366%, down from February 21 close of 1.471%;
- 30-years is at 1.831%, down from 1.918%
- 2-years yield is at 1.252%, down from 1.350%
- The 10-Year-&-2-Year spread is at 0.114 down from 0.121
- Is at 23.19 down -1.84 from February 24 close; above 5-day SMA;
- Next high resistance is 26.35, the high of February 24; the low support is the lower high of the gap at 18.88, the high of February 3
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 lower on Monday, February 24 in higher volume. Indices gapped down at the open and then traded down closing near day’s lows. Most are at support created by the lows of January and February.
The stock market sold off more than 3% on Monday following a surge in coronavirus cases outside China, including South Korea, Italy, and Iran. The Dow Jones Industrial Average (-3.6%), S&P 500 (-3.4%), and Russell 2000 (-3.0%) each turned negative for the year, while the Nasdaq Composite (-3.7%) gave up most of its monthly gains.
South Korea’s Kospi fell 3.9%, and Italy’s MIB fell 5.4%. China’s Shanghai Composite declined just 0.3% amid reports that the rate of new coronavirus cases may have peaked in the region.
In turn, de-risking efforts were widespread with all 11 S&P 500 sectors finishing in negative territory, including seven that dropped at least 3.0%. The energy (-4.7%), information technology (-4.2%), and consumer discretionary (-3.5%) sectors led the retreat, while the utilities sector (-1.2%) declined the least.
Away from equities, investors continued to seek safety in gold ($1676.70/ozt, +27.80, +1.7%) and U.S. Treasuries given the growth concerns and weakness in stocks. Hedging interest against further downside was also on full display by the 46.6% surge in the CBOE Volatility Index (25.03, +7.95).
The 2-yr yield and the 10-yr yield fell nine basis points each to 1.26% and 1.38%, respectively. The U.S. Dollar Index finished flat at 99.30. WTI crude dropped 3.9%, or $2.09, to $51.25/bbl.
Investors did not receive any economic data on Monday.