Directional Bias For The Day:
- S&P Futures are higher; trending up since 8:45 PM on Sunday; new leg since 5:00 AM
- The odds are for an up day with good chance of sideways to up move from pre-open levels around 2860.00 – watch for break below 2832.50 for change of fortune
- Key economic data due:
- Trade Balance ( -44.4B vs. -41.0B est.; prev. -39.8B ) at 8:30 AM
- Final Services PMI ( 27.0 est.; prev. 27.0) at 9:45 AM
- ISM Non-Manufacturing PMI ( 37.5 est.; prev. 52.5) at 10:00 AM
- IBD/TIPP Economic Optimism ( 35.s est.; prev. 47.8)
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2844.24, 2817.12 and 2808.53
- Critical resistance levels for S&P 500 are 2869.09, 2892.47 and 2917.80
- Key levels for eMini futures: break above 2865.00, the high of 4:00 AM and break below 2832.50, the low of 5:00 AM
- On Monday at 4:00 PM, S&P future (June 2020) closed at 2833.00 and the index closed at 2842.74 – a spread of about -9.75 points; futures closed at 2825.25 for the day; the fair value is +7.75
- Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +36.25; Dow by +305 and NASDAQ by +119.00
Markets Around The World
- Markets in the East were mostly up – Mumbai was down; Shanghai, Tokyo and Seoul were closed for trading
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 0.637%, down from May 1 close of 0.642%;
- 30-years is at 1.297%, up from 1.278%
- 2-years yield is at 0.188% down from 0.200%
- The 10-Year-&-2-Year spread is at 0.449 up from 0.442
- Is at 34.17 down -1.80 from May 4 close; above 5-day SMA;
- Down from all time high of 85.47 on March 18; recent high 47.77 on April 21, recent low 30.54 on April 28
- Sentiment: Risk-On
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 mostly higher on Monday, May 4 in mostly lower volume. Dow Jones Transportation Average and NYSE Composite closed lower. DJT was the only one to trade in higher volume. Indices gapped down at the open and then mostly traded higher after the morning session. Most closed near the high of the day switching the short-term bias to the upside.
The S&P 500 advanced 0.4% on Monday, closing near session highs, as strength in the mega-cap technology stocks helped the market overcome an increase in U.S.-China tensions and cautious commentary from Warren Buffett.
The tech-sensitive Nasdaq Composite rose 1.2% to climb past the benchmark index, Dow Jones Industrial Average (+0.1%), and Russell 2000 (+0.3%).[…]
Eight of the 11 S&P 500 sectors finished in positive territory, paced by the energy (+3.7%) and information technology (+1.4%) sectors. The industrials (-1.3%) and financials (-0.9%) sectors lagged the broader market.[…]
U.S. Treasuries posted small gains to begin the week, pushing yields slightly lower. The 2-yr yield declined three basis points to 0.17%, and the 10-yr yield declined one basis point to 0.64%. The U.S. Dollar Index increased 0.5% to 99.54. WTI crude increased 3.0%, or $0.60, to $20.37/bbl.
Monday’s economic data was limited to the Factory Orders report, which declined 10.3 m/m in March (Briefing.com consensus -9.1%) following a downwardly revised 0.1% decline (from 0.0%) in February.
• The key takeaway from the report is that it shows how quickly manufacturing activity dropped off as shutdown initiatives increased. That drop off should be even more pronounced in April.