Directional Bias For The Day:

• S&P Futures are lower;
• The odds are for a down day with a good chance of sideways move around the pre-open level around 3675.00; watch for a break above 3692.00 and below 3670.25 for clarity
• Key economic data report due during the day:
  • ISM Manufacturing PMI ( 56.6 est; prev. 57.5) at 10:00 AM
  • ISM Manufacturing Prices ( 66.0 est.; prev. 65.4) at 10:00 AM

Directional Bias Before Open:

Weekly: Uptrend Daily: Uptrend

120-Min: Down-Side 30-Min: Down-Side 15-Min: Down-Side 6-Min: Down-Side

Key Levels:

• Critical support levels for S&P 500 are 3686.48, 3680.49, and 3662.71
• Critical resistance levels for S&P 500 are 3708.09, 3723.31, and 3744.63
• Key levels for E-mini futures: break above 3704.00, the high of 6:15 AM and break below 3677.75, the low of 2:45 AM

Pre-Open

• On Monday at 4:00 PM, S&P futures (March 2021) closed at 3693.50 and the index closed at 3700.65 – a spread of about -7.00 points; futures closed at 3692.25 for the day; the fair value is +0.75
• Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -8.00; Dow by -33, and NASDAQ by -45.25

Markets Around The World

• Markets in the East closed mostly higher – Tokyo and Sydney were down
• European markets are mostly lower – the UK is up
• Currencies (from two weeks ago):
  

  Up	Down
  EUR/USD GBP/USD AUD/USD NZD/USD	Dollar index USD/JPY USD/CHF USD/CAD INR/USD

• Commodities (from two weeks ago):
  • Energy futures are lower
  • Precious metals are higher
  • Industrial metals are mostly higher
  • Most soft commodities are mixed
• Treasuries (from two weeks ago)
  • 10-years yield closed at 0.932%, down 0.9 BP from two weeks ago;
  • 30-years is at 1.682%, down 0.2 BP;
  • 2-years yield is at 0.125%, down 5.1 BP;
  • The 10-Year-&-2-Year spread is at 0.749, up from 0.743
• VIX
  • At 27.52 @ 8:00 AM; up from the last close; above 5-day SMA;
  • Recent high =  31.46 on December 21; low =  20.99 on December 29
  • Sentiment: Risk-Off-to-Neutral

The trend and patterns on various time frames for S&P 500:

Monthly	Confirmed Uptrend December 2020 was a green candle with a small gap and with almost no upper and lower shadows; all-time closing and intraday highs; Stochastic %K above %D near 100; RSI-9 above 70; broke above a downtrend line from January 2018 Above the upper band of a 120-month regression channel; The sequence of higher highs and higher lows is resumed
Weekly:	The week ending on January 1 was a green candle that gapped up; all-time intraday highs; Stochastic (9,1, 3): %K is above %D; above 90 RSI (9) is above 70 The week was up +53.01 or +1.4%; the 5-week ATR is 79.31 An up week; third in the last five weeks and sixth in the last ten weeks The weekly week pivot point=3746.43, R1=3769.84, R2=3783.60; S1=3732.67, S2=3709.26; R1/R2 pivot levels were breached Above 10-week EMA, 39-week SMA, and 89-week SMA Uptrend since March 23
Daily	A Bearish Engulfing candle at the all-time highs; with almost no upper shadow and small lower shadow; Broke above a symmetrical triangle at 3550.00 level on November 9; the 61.8% extension target near 3750.00 is achieved; 100% extension target is near 3900.00 %K  crossed below %D; %D Bearish Divergence RSI-9 near 50 from above 70; below 8-day EMA At/above 20-day EMA; above 50-day EMA, 100-day, and 200-day SMA Confirmed Uptrend
2-Hour (E-mini futures)	Declined from the all-time high of 3773.25 on Monday to near previous support, the low 3651.00 of December 22; bounced up above 3700.00; RSI-21 is around 35 Below EMA20, which is below EMA10 of EMA50 Bias: Down-Side
30-Minute (E-mini futures)	Bouncing up since 12:00 PM on Monday from a support level;  bounced above 38.2% Fibonacci Retracement level of the earlier decline; RSI-21 is moving between 50 and 40 %K is below %D; below 20 Below EMA20, which is below EMA10 of EMA50 Bias: Down-Side
15-Minute (E-mini futures)	Bollinger Band (20, 2.0) is moving sideways since 7:45 PM The Bollinger Band is relatively stable since 7:45 PM Stochastic (9, 1, 3): %K is crossing above %D from below 20 at 8:30 AM Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Monday, January 4 in higher volume. Most indices made Bearish Engulfing candles with almost no upper shadows and small lower shadows. For most, Stochastic %D also made Bearish Divergences. All but one S&P sector – Energy – closed lower.

From Briefing.com:

The major indices were down more than 2.0% on the first trading day of 2021, as investors took profits, but they pared losses in the afternoon. The S&P 500 (-1.5%), Dow Jones Industrial Average (-1.3%), Nasdaq Composite (-1.5%), and Russell 2000 (-1.5%) declined between 1.3-1.5%. The S&P 500 and Dow briefly set all-time highs at the open. […] Influential weakness came out of the information technology (-1.8%) and industrials (-2.6%) sectors, although the real estate (-3.3%) sector was the weakest link. The energy sector (+0.1%) eked out a slim gain despite lower oil prices ($47.59/bbl, -0.68, -1.4%). […] The 2-yr yield finished flat at 0.12%, and the 10-yr yield finished flat at 0.92% after touching 0.95% in the morning. The U.S. Dollar Index finished flat after being down 0.6% intraday. […] Total construction spending increased 0.9% in November (Briefing.com consensus 0.9%) after increasing a revised 1.6% (from 1.3%) in October. Total private construction spending rose 1.2% m/m and total public construction spending decreased 0.2%. […] The December IHS Markit Manufacturing PMI increased to 57.1 from 56.5 in November. […] Dow Jones Industrial Average -1.3% YTD Nasdaq Composite -1.5% YTD Russell 2000 -1.5% YTD S&P 500 -1.5% YTD