Directional Bias For The Day:

• S&P Futures are lower at 8:15 AM; broke below an up-sloping flag at 6:15 AM after climbing up from 4429.50 at 9:45 PM to 4476.00 at 5:30 AM
• The odds are for a down day with elevated volatility; watch for a break above 4477.75 for a change of sentiments
• Key economic data report due during the day:
  • CB leading Index ( 0.8% est.; prev. 1.1%) at 10:00 AM

Directional Bias Before Open:

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

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

Key Levels:

• Critical support levels for S&P 500 are 4466.45, 4447.47, and 4430.28
• Critical resistance levels for S&P 500 are 4477.95, 4500.00, and 4512.88
• Key levels for E-mini futures: break above 4477.75, the high of 5:00 AM and break below 4439.75, the low of 11:45 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (March 2022) closed at 4474.25 and the index closed at 4482.73 – a spread of about -8.00 points; futures closed at 4474.75 for the day; the fair value is -0.50
• Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -23.75; Dow by -84; and NASDAQ by -126.00

Markets Around The World

• Markets in the East closed mostly higher – Shanghai and Mumbai closed lower
• European markets are mixed – Germany, Italy, Switzerland, and STOXX 600 are up; the UK, France, and Spain are down
• Currencies (Compared to two weeks ago):
  

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

• Commodities (Compared to two weeks ago):
  • Energy futures are higher
  • Precious metals are higher
  • Industrial metals are higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • 10-years yield closed at 1.827%, up +12.2 basis points from two weeks ago;
  • 30-years is at 2.138%, up +5.0 basis points;
  • 2-years yield is at 1.055%, up +21.3 basis points;
  • The 10-Year-&-2-Year spread is at 0.772, up from 0.863
  • The 30-Year-&-10-Year spread is at 0.311, down from 0.383
• VIX
  • At 26.57 @ 7:00 AM; up from the last close; above 5-day SMA;
  • Recent high = 27.39 on December 20, 2021; low =  17.36 on January 12
  • Sentiment: Risk-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 January 14 was a Doji candle; Stochastic (9,1, 3): %K is below %D; RSI-9 is just above 55 The week was down -14.18 or -0.3%; the 5-week ATR  is 149.40 A down week; third in the last five weeks, and sixth in the previous ten weeks The weekly pivot point=4664.64, R1=4747.04, R2=4831.23; S1=4580.45, S2=4498.05; S1 pivot level was breached At/below 10-week EMA; above 39-week SMA; above 89-week SMA Uptrend Under Pressure
Daily	A large red candle with a relatively small lower shadow and an upper shadow more than three fourth f the real body; broke below a bearish ABCD pattern – the 100% extension target near 4512.45 is achieved and the 161.8% extension target is near 4366.37; breaking below a 250 points trading range with 61.* extension target near 4341.00 and the 100% extension target is near 4250.00 Stochastic (9, 1, 3): %K is below %D; near 0 RSI-9 is trending down; broke below 25; below 8-day EMA; Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA In Correction
2-Hour (E-mini futures)	Downtrend since January 4; broke below a horizontal channel – 61.8% extension target is near 4340.00 and 100% extension target is near 4245.00 RSI-21 is moving around 30; potential Bullish Divergence Below EMA20, which is below EMA10 of EMA50 Bias: Down
30-Minute (E-mini futures)	Below a downtrend line from since January 4 high; sequence of lower highs and lower lows; moving sideways to down since 4:00 PM RSI-21 has risen up to 40 from below 25 and after making Bullish Divergence at 10:00 PM Below EMA20, which is below EMA10 of EMA50 Bias: Down
15-Minute (E-mini futures)	The Bollinger Band (20, 2.0) is moving sideways since 9:45 PM following a sharp down move The Bollinger Band is expanding slightly since 6:15 AM with price walking down the lower bound Stochastic (9, 1, 3): %K is crisscrossing %D around 20 Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Thursday, January 20, in mostly higher volume. Dow Jones Industrial Average traded in ower volume. Major indices opened higher and moved up in the morning trading but then hit resistance levels. After a few tries to break above, indices broke down in the afternoon and turned sharply negative. The decline accelerated in the last hour of trading.

From Briefing.com:

The S&P 500 declined 1.1% on Thursday in another disappointing session, as investors doubled down on the inclination to sell into strength. The benchmark index faded a 1.5% gain and closed the session down 7.0% from its all-time high. The Nasdaq Composite fell 1.3% after being up 2.1% intraday. The Dow Jones Industrial Average fell 0.9% after being up 1.3% intraday. The Russell 2000 fell 1.9% after being up 2.0% intraday. Ten of the 11 S&P 500 sectors closed lower after all 11 traded in positive territory in the morning. The consumer discretionary (-1.9%), materials (-1.4%), and information technology (-1.3%) sectors led the retreat, while the utilities sector (+0.1%) eked out a gain. […] The 10-yr yield increased just one basis point to 1.83% while the 2-yr yield rose four basis points to 1.05% on continued expectations for a more hawkish Fed. The U.S. Dollar Index gained 0.4% to 96.85. WTI crude futures fell 0.7%, or $0.57, to $86.29/bbl. […] Initial claims for the week ending January 15 increased by 55,000 to 286,000 (Briefing.com consensus 211,000) while continuing claims for the week ending January 8 increased by 84,000 to 1.635 million. […] Existing home sales declined 4.6% m/m in December to a seasonally adjusted annual rate of 6.18 million (Briefing.com consensus 6.42 million). Total sales in December were down 7.1% from a year ago. Total home sales in 2021, however, reached 6.12 million, which was up 8.5% year-over-year and the highest annual level since 2006. […] The Philadelphia Fed Index for January increased to 23.2 (Briefing.com consensus 20.0) from 15.4 in December. […] Dow Jones Industrial Average -4.5% YTD S&P 500 -6.0% YTD Russell 2000 -9.9% YTD Nasdaq Composite -9.5% YTD Overseas:  Europe: DAX +0.7%, FTSE -0.1%, CAC +0.3% Asia: Nikkei +1.1%, Hang Seng +3.4%, Shanghai -0.1% Commodities:  Crude Oil -0.05 @ 85.37 Nat Gas -0.18 @ 3.67 Gold -0.30 @ 1841.90 Silver +0.46 @ 24.66 Copper +0.09 @ 4.56