Directional Bias For The Day:
- S&P Futures are higher; bouncing off since 4:00 AM from oversold levels; up more than 50 points
- The odds are for an up to sideways day with elevated volatility; watch for break below 3122.25 for change of fortune
- Key economic data due:
- New Home Saes ( est. 714K; prev. 694K ) at 10:00 AM
- &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 3118.77, 3108.40 and 3102.53
- Critical resistance levels for S&P 500 are 3141.44, 3156.88 and 3177.22
- Key levels for eMini futures: break above 3149.75, the high of 8:30 AM and break below 3122.25, the low of 7:30 AM
- On Tuesday, at 4:00 PM, S&P future (March 2020) closed at 3127.75 and the index closed at 3128.21 – a spread of about -0.50 points; futures closed at 3132.50 for the day; the fair value is -4.75
- Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +6.00; Dow by +42 and NASDAQ by +30.75
Markets Around The World
- Markets in the East closed lower;
- European markets are mostly lower – Spain and Italy are up
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.364%, down from February 24 close of 1.377%;
- 30-years is at 1.849%, up from 1.837%
- 2-years yield is at 1.186%, down from 1.252%
- The 10-Year-&-2-Year spread is at 0.178 up from 0.125
- Is at 25.79 down -2.06 from February 25 close; above 5-day SMA;
- Next high resistance is 30.25, the high of February 25; 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 sharply lower on Tuesday, February 25 in higher volume for the second day. Indices bounced up at the open but it did not last and they reversed course in the first half hour of trading and traded down for the rest of the day and closed near day’s lows. Dow Jones Industrial Average breached the lows of December and others are nearing their December lows. NASDAQ Composite is holding better relatively though it too has breached the lows of January.
U.S. stocks sold off again on Tuesday, as the global spread of the coronavirus continued to undermine growth expectations and exacerbate the flight for safety in Treasuries. The Nasdaq Composite (-2.8%) turned negative for the year while the S&P 500 (-3.0%), Dow Jones Industrial Average (-3.2%), and Russell 2000 (-3.5%) dropped at least 3.0%.
All 11 S&P 500 sectors finished with steep losses ranging from 1.8% (consumer staples) to 4.3% (energy).
Elsewhere, the rally in U.S. Treasuries persisted amid the underlying growth concerns. The 2-yr yield fell six basis points to 1.20%, and the 10-yr yield fell five basis points 1.33% after setting a record low at 1.31%. The U.S. Dollar Index fell 0.4% to 98.96. WTI crude fell back below $50 per barrel, closing the session down 2.7%, or $1.36, at $49.89/bbl.
• The Conference Board’s Consumer Confidence Index increased to 130.7 in February (Briefing.com consensus 132.0) from a revised 130.4 (from 131.6) in January.
o The key takeaway from the report is that it did not show a significant change in sentiment when factoring in the revision to the January reading.
• The S&P Case-Shiller Home Price Index increased 2.9% in December (Briefing.com consensus 3.2%).
• The FHFA Housing Price Index increased 0.6% in December.