Directional Bias For The Day:

• S&P Futures are higher;
• The odds are for an up day; watch for a break below 3754.75
• Key economic data report due during the day:
  • Challenger Jobs Cut ( 134.5%.; prev. 45.4%) at 7:30 AM
  • Unemployment Claims ( 787K vs. 798K est.; 790K) at 8:30 AM
  • Trade Balance ( -68.1B vs. -66.7B est.; prev. -63.1B) at 8:30 AM
  • ISM Services PMI ( est. 54.5 est.; prev. 55.9) at 10:00 AM

Directional Bias Before Open:

Weekly: Uptrend Daily: Uptrend

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

Key Levels:

• Critical support levels for S&P 500 are 3742.39, 3705.34 and 3697.34
• Critical resistance levels for S&P 500 are 3769.59, 3782.20, and 3823.21
• Key levels for E-mini futures: break above 3773.25, the high of 2:00 AM and break below 3747.00, the low of 6:00 AM

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (March 2021) closed at 3740.50 and the index closed at 3748.14 – a spread of about -7.75 points; futures closed at 3740.50 for the day; the fair value is 0.0
• Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +21.25; Dow up by +109, and NASDAQ by +99.00

Markets Around The World

• Markets in the East closed mostly higher – Hong Kong and Mumbai were down
• European markets are mostly higher – the UK and Spain are down
• Currencies (from two weeks ago):
  

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

• Commodities (from two weeks ago):
  • Energy futures are higher
  • Precious metals are higher
  • Industrial metals are higher
  • Most soft commodities are mostly higher
• Treasuries (from two weeks ago)
  • 10-years yield closed at 1.071%, up 11.6 BP from two weeks ago;
  • 30-years is at 1.851%, up 15.4 BP;
  • 2-years yield is at 0.145%, up 1.2 BP;
  • The 10-Year-&-2-Year spread is at 0.929, up from 0.822
• VIX
  • At 23.22 @ 9:00 AM; down from the last close; below 5-day SMA;
  • Recent high =  29.19 on January 4; low =  20.99 on December 29
  • Sentiment: Risk-On-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 green candle with small lower shadow and large upper 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  turning up but below %D; %D Bearish Divergence on Monday RSI-9 turning up from 50; 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)	Near the all-time high, which is shaping up as a Double Top or Horizontal Channel pattern; RSI-21 has declined to below 60 from above 70 Above EMA20, which is above EMA10 of EMA50 Bias: Up-Side
30-Minute (E-mini futures)	Moving sideways since 11:00 AM on Wednesday; RSI-21 is moving above 50 %K is above %D; above 80 At/above EMA20, which is above EMA10 of EMA50 Bias: Up-Side
15-Minute (E-mini futures)	Bollinger Band (20, 2.0) is moving sideways since 9:45 PM The Bollinger Band is relatively stable, but expanded, since 9:45 PM Stochastic (9, 1, 3): %K is above %D; above 80 Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Wednesday, January 6 in higher volume. NASDAQ Composite closed down. Indices were higher for most of the day but started to decline at 2:00 PM influenced by news. All but two S&P sectors – Technologies and Real Estate – closed higher.

From Briefing.com:

The Dow Jones Industrial Average (+1.4%) and Russell 2000 (+4.0%) closed at record highs on Wednesday, as small-caps and cyclical stocks exhibited strength on the prospect of a Democrat-controlled Senate. The market, however, closed off session highs, as risk sentiment waned after pro-Trump protesters breached Capitol Hill. The S&P 500 finished with a 0.6% gain after being up 1.5% intraday, while the Nasdaq Composite declined 0.6% amid weakness in the mega-caps. […] Accordingly, the cyclical financials (+4.4%), materials (+4.1%), energy (+3.0%), and industrials (+2.4%) sectors finished atop the standings with strong gains. The possibility of increased tech scrutiny, however, reined in the influential information technology (-1.8%) and communication services (-0.7%) sectors. […] Despite the scene on Capitol Hill, gold prices ($1909.00/ozt, -2.4%) remained suppressed and there was no inclination to buy the dip in Treasuries, which were selling off on expectations for further economic stimulus. The 10-yr yield rose nine basis points to 1.04%, while the 2-yr yield increased two basis points to 0.14%. The U.S. Dollar Index was little changed at 89.40. […] Factory orders for manufactured goods increased 1.0% in November (Briefing.com consensus 0.6%) after increasing a revised 1.3% (from 1.0%) in October. This is the seventh consecutive monthly increase in factory orders. […] The ADP Employment Change report for December estimated private-sector payrolls decreased by 123,000 (Briefing.com consensus +120,000). The November reading was revised lower to 304,000 from 307,000. The December IHS Markit Services PMI decreased to 54.8 from 55.3 in November. The weekly MBA Mortgage Applications Index increased 1.7% following a 0.8% increase in the prior week. […] Russell 2000 +4.2% YTD Dow Jones Industrial Average +0.7% YTD S&P 500 -0.2% YTD Nasdaq Composite -1.1% YTD