Directional Bias For The Day:
- S&P Futures are lower;
- The odds are for an up day – a bounce from oversold levels; extreme volatility – watch for break below 2327.00 and break above 2401.00
- Key economic data due:
- Philly Fed Manufacturing Index ( -12.7 vs. 9.5 est.; prev. 36.7) at 8:30 AM
- Unemployment Claims ( 281K vs. 220K est.; prev. 211K) at 8:30 AM
- CB Leading Index (est. 0.1%; prev. .8%) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2359.75, 2305.91 and 2280.52
- Critical resistance levels for S&P 500 are 2409.81, 2453.57 and 2470.29
- Key levels for eMini futures: break above 2415.00, the high of 4:30 AM and break below 2327.00, the low of 8:00 AM
- On Wednesday, at 4:00 PM, S&P future (June 2020) closed at 2392.75 and the index closed at 2398.10 – a spread of about -5.25 points; futures closed at 2401.50 for the day; the fair value is -8.75
- Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -53.25; Dow by -390 and NASDAQ by -106.50
Markets Around The World
- Markets in the East closed down
- European markets are mostly lower – Italy and Switzerland are up
- Dollar index
- Crude Oil
- 10-yrs yield is at 1.190%, down from March 18 close of 1.266%;
- 30-years is at 1.835%, down from 1.897%
- 2-years yield is at 0.479% down from 0.548%
- The 10-Year-&-2-Year spread is at 0.711 down from 0.718
- Is at 79.30 up +2.85 from March 18 close; above 5-day SMA;
- At highest levels ever
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)||
The indices gapped down at the open and the though the gap was closed during the day, indices made multi-year low. Indices recovered by the end and most made small real body candles with long lower shadow and small upper shadows.
The S&P 500 fell 5.2% on Wednesday, although it did drop as much as 9.8% intraday as pandemic fears continued to hit not only stocks but also Treasuries and commodities. A strong finish also pared losses in the Dow Jones Industrial Average (-6.3%) and Nasdaq Composite (-4.7%) but did little for the Russell 2000 (-10.4%).
Selling was widespread and was made most pronounced in the cyclical energy (-14.3%), financials (-8.7%), and industrials (-7.2%) sectors. The energy space was crushed by the 24.4% collapse in WTI crude ($20.42/bbl, -$6.06), which fell to its lowest level since 2002. The communication services sector (-2.8%) declined the least today.
The 2-yr yield rose seven basis points to 0.52%, and the 10-yr rose 27 basis points to 1.27%. The U.S. Dollar Index rose 1.4% to 100.97.
• Housing starts were stronger than expected in February at a seasonally adjusted annual rate of 1.599 million (Briefing.com consensus 1.475 million), yet they were down 1.5% m/m and will be expected to drop further in March. Building permits were weaker than expected at 1.464 million (Briefing.com consensus 1.480 million) and were down 5.5% m/m.
o The key takeaway from the report is that it will be largely dismissed on the grounds that it is “old” data in a new world that is dealing with economic shutdown measures to curb the spread of COVID-19.
• The weekly MBA Mortgage Applications Index declined 8.4% following last week’s 55.4% surge.