Directional Bias For The Day:

• S&P Futures are little change at 8:45 AM; moved up from 4668.00 at 11:45 PM to around 4690.00
• The odds are for a down day with elevated volatility; watch for a break above an Inverse Head-&-Shoulder pattern neck around 4703.00 for a change of sentiments
• Key economic data report due during the day:
  • Unemployment Claims ( 207K vs. 199K est.; prev. 198K) at 8:30 AM
  • Trade Balance ( -80.2B vs. -80.5B est.; prev. 67.1B) at at 8:30 AM
  • ISM Services PMI ( 67.0 est.; prev. 69.1) at 10:00 AM
  • factory Orders ( 1.5% est.; prev. 1.0%) at 10:00 AM

Directional Bias Before Open:

Weekly: Uptrend Daily: Uptrend Under Pressure 120-Min: Side-Down

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

Key Levels:

• Critical support levels for S&P 500 are 4680.21, 4672.12, and 4631.97
• Critical resistance levels for S&P 500 are 4728.88, 4739.48, and 4757.49
• Key levels for E-mini futures: break above 4703.00, the high of 7:15 PM and break below 4679.25, the low of 3:30 AM

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (March 2022) closed at 4692.25 and the index closed at 4700.58 – a spread of about -8.25 points; futures closed at 4692.50 for the day; the fair value is -0.25
• Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were up by +0.25; Dow up by +95; and NASDAQ down by -69.75

Markets Around The World

• Markets in the East closed mostly lower – Tokyo and Mumbai closed up
• European markets are mostly higher – Switzerland is lower
• Currencies (Compared to two weeks ago):
  

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

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are higher
  • Industrial metals are higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • 10-years yield closed at 1.658%, up +17.1 basis points from two weeks ago;
  • 30-years is at 2.062%, up +16.5 basis points;
  • 2-years yield is at 0.758%, up +10.0 basis points;
  • The 10-Year-&-2-Year spread is at 0.900, up from 0.829
  • The 30-Year-&-10-Year spread is at 0.404, down from 0.410
• VIX
  • At 20.10 @ 8:00 AM; up from the last close; above 5-day SMA;
  • Recent high = 27.39 on December 20; low =  16.34 on January 4
  • Sentiment: Risk-Neutral-to-Off

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

Monthly	December 2021 was a green candle that opened above the previous week’s real-body and closed higher with a small upper shadow and a slightly longer lower shadow; at all-time highs Stochastic (9, 1, 3): %K crossed above %D; above 90; RSI-9 is turning up from above 75; Above the upper band of a 120-month regression channel; Confirmed Uptrend: sequence of higher highs and higher lows
Weekly:	The week ending on December 31 was a small green candle like a tear-drop Stochastic (9,1, 3): %K is turning down above %D; near 80 RSI-9 is just above 65 The week was up +40.39 or +0.9%; the 5-week ATR  is 155.50 An up week; third in the last five weeks, and sixth in the previous ten weeks The weekly pivot point=4769.70, R1=4805.41, R2=4844.64; S1=4730.47, S2=4694.76; R1 pivot level was breached Above 10-week EMA; above 39-week SMA; above 89-week SMA Uptrend Resumed
Daily	A large red candle with a small upper shadow and almost no lower shadow forming a 3-day Evening Star pattern near all-time highs Stochastic (9, 1, 3): %K is below %D; near 0; Bearish Divergence RSI-9 has fallen to near 45 from above 60; below 8-day EMA; Bearish Divergence Below 20-day EMA; above 50-day EMA, 100-day SMA, and 200-day SMA Uptrend Under Pressure
2-Hour (E-mini futures)	Declined from the all-time high at 8:00 AM on January 4; broke below a Horizontal Channel – between 4798.00 and 4750.00 – the 100% extension target around 4705.00 is achieved; the 161.8% extension target is near 4678.00 RSI-21 is trending down since 2:00 PM on December 27; below a downtrend line; made few Bearish Divergences Below EMA20, which is below EMA10 of EMA50 Bias: Side-Down
30-Minute (E-mini futures)	Downtrend since 9:30 AM on January 4 following a sideways move; forming an Inverse Head-&-Shoulder pattern; a break above 4703.00 will complete the pattern with the 61.8% extension target near 4725.00 and the 100% extension target near 4738.00 RSI-21 has risen from below 20 at 4:00 PM on Wednesday to near 45; Bullish Divergence at 12:00 AM At/above EMA20, which is below EMA10 of EMA50 Bias: Down-Side
15-Minute (E-mini futures)	The Bollinger Band (20, 2.0) is moving sideways since 9:30 PM following a down move on Wednesday The Bollinger Band is contracting; Stochastic (9, 1, 3): %K is crossing below %D at 8:30 AM Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Wednesday, January 5, in higher volume. The major indices opened a bit higher and then traded sideways to down till the FOMC meeting minutes release at  2:00 PM and then gave up the ghost and declined sharply.

From Briefing.com:

[…] The Nasdaq Composite and Russell 2000 both dropped 3.3%, the S&P 500 dropped 1.9%, and the Dow Jones Industrial Average dropped 1.1% after setting an all-time high in early action. […] Growth stocks extended intraday losses, as the 10-yr yield topped 1.70% in the wake of the report, while value stocks gave up intraday gains. All 11 S&P 500 sectors closed lower, with real estate (-3.2%), information technology (-3.1%), and communication services (-2.9%) each falling about 3.0%. The consumer staples (-0.03%), utilities (-0.1%), energy (-0.1%), and materials (-0.1%) sectors closed fractionally lower amid increased selling pressure into the close. […] The 2-yr yield, which tracks expectations for the fed funds rate, rose seven basis points to 0.83%. The 10-yr yield settled the session four basis points higher at 1.71%, feeding into expectations for a run-up to 2.00%. The U.S. Dollar Index decreased 0.1% to 96.20. WTI crude futures rose 1.1%, or $0.82, to $77.82/bbl. […] ADP estimated that 807,000 jobs were added to private sector payrolls in December (Briefing.com consensus 425,000), up from a downwardly revised 505,000 (from 534,000) in November. The preliminary IHS Markit Services PMI for December decreased to 57.6 from 58.0 in the final reading for November. The MBA Mortgage Applications Index decreased 5.6% on a weekly basis. Crude oil inventories had a weekly draw of 2.144 mln barrels, which was the EIA’s sixth draw in six weeks. […] Dow Jones Industrial Average +0.2% YTD S&P 500 -1.4% YTD Russell 2000 -2.3% YTD Nasdaq Composite -3.5% YTD   Overseas:  Europe: DAX +0.7%, FTSE +0.2%, CAC +0.8% Asia: Nikkei +0.1%, Hang Seng -1.6%, Shanghai -1.0% Commodities:  Crude Oil +0.66 @ 77.62 Nat Gas +0.07 @ 3.69 Gold +2.00 @ 1817.20 Silver -0.10 @ 22.98 Copper -0.07 @ 4.40