Directional Bias For The Day:

• S&P Futures are higher before the open; moving up since 3:15 AM from 2903.75
• The odds are for a sideways day with elevated volatility – watch for break above 2945.75 and below 2927.50 for more clarity
• No key economic data due:

Directional Bias Before Open:

Weekly: In Correction Daily: In Correction 120-Min: Side

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

Key Levels:

• Critical support levels for S&P 500 are 2938.57, 2922.35 and 2913.86
• Critical resistance levels for S&P 500 are 2959.26, 2969.49 and 2978.50
• Key levels for E-mini futures: break above 2945.25, the high of 8:00 PM and break below 2927.50, the low of 7:30 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (June 2020) closed at 2944.00 and the index closed at 2948.51 – a spread of about -5.50 points; futures closed at 2937.00 for the day; the fair value is +7.00
• Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +5.00; Dow down by +64 and NASDAQ by +9.50

Markets Around The World

• Markets in the East closed lower
• European markets are mostly mixed – Germany, France, Spain and Italy are up; U.K., Switzerland and STOXX 600 are down
• Currencies:
  

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

• Commodities:
  

  Up	Down
  Gold Silver Platinum Sugar Cocoa	Crude Oil NatGas Copper Palladium Coffee Cotton

• Bond
  • 10-yrs yield is at 0.669%, down from May 21 close of 0.677%;
  • 30-years is at 1.387%, down from 1.399%
  • 2-years yield is at 0.166% down from 0.158%
  • The 10-Year-&-2-Year spread is at 0.503 down from 0.519
• VIX
  • Is at 29.395; down -0.14 from May 21 close; at/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-Neutral

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

Monthly	Uptrend under pressure April 2020 was a large green candle with small upper and lower shadows; index advanced +12.7% following a decline of 12.5% in March; Stochastic %K is crossing above %D and near 60; %K Bearish Divergence in January RSI-9 turning up after declining to 34.91, the lowest level since April 2009, from above 75 in January and ; Bearish Divergence Regaining the lower band of the 120-month regression channel to middle of the band; only third break below since 2009 but first close below it Sequence of higher highs and higher lows broken
Weekly:	The week ending on May 15 was a red Harami candle with lower shadow double the size of the real body and upper shadow half of it; an indecisive candle with more upward bias than downward Stochastic (9,1, 3): %K is above %D; turning down from above 90 RSI (9) is turning down; from just below 50 The week was down -66.10 or -2.3%; the 5-week ATR is 150.45 The weekly week pivot point =2858.72, R1=2950.80, R2=3037.90; S1=2771.62, S2=2679.54; S1 pivot level was breached A down week; third in last five weeks and sixth in last ten weeks All time high of 3393.52, the last swing high, was during the week of February 17; broke below the low of the week of December 24, 2018; support near 2193.81, the high during the week of August 15, 2016; sequence of higher highs and higher lows broken Above 10-week EMA; below 39-week SMA; at/below 89-week SMA In Correction
Daily	A relatively small red candle that opened lower and mostly traded lower during the day; a thee-day Evening Star Pattern is emerging; near a resistance zone and 61.8% Fibonacci retracement %K crossing below %D; above 80 RSI-9 is just below 60; above 8-day RSI; Above 20-day EMA and 50-day EMA; at/below 100-day SMA and 200-day SMA; In Correction; uptrend since March 23
2-Hour (E-mini futures)	Moving sideways since 10:00 AM on May 18;  at the upper bound of a Horizontal Channel bounded by 2975.00 and 2771.00; near the middle of a smaller Horizontal Channel bounded by 2975.75 and 2908.00; RSI-21 bouncing from below 30 after declining from above 75 and after making Bearish Divergence; %K is above %D; At/above EMA20, which is above EMA10 of EMA50 Bias: Side
30-Minute (E-mini futures)	Drifting sideways since 11:30 A on May 18 within a horizontal channel between 2975.00 and 2908.00; RSI-21 is moving up since 3:30 AM after making a Bullish Divergence %K is crisscrossing %D Above EMA10 of EMA50, which is above EMA20 Bias: Side
15-Minute (E-mini futures)	Bollinger Band (20, 2.0) moving up since 4:15 AM The Bollinger Band expanding since 4:15 AM with price walking up the upper band Stochastic (9, 1, 3): %K is crisscrossing %D Bias: Down-Up

Previous Session

Major U.S. indices closed mostly lower on Thursday, May 21 in mostly lower volume. Russell 2000 closed up and NASDAQ Composite traded in higher volume. NASDAQ also made a Bearish Engulfing candle.Most indices made small candles. All but two – Consumer Discretionary and Industrials – S&P sectors closed lower.

From Briefing.com:

The S&P 500 declined 0.8% on Thursday, failing to overcome weak economic data and a fresh increase in U.S.-China tensions. The Dow Jones Industrial Average lost 0.4%, and the Nasdaq Composite lost 1.0%. The small-cap Russell 2000, however, eked out a 0.1% gain.

Losses broadened out to ten of the 11 S&P 500 sectors, including energy (-1.5%) and information technology (-1.4%). The industrials sector (+0.2%) was the lone sector to close in positive territory, thanks to shares of Boeing (BA 139.00, +5.68, +4.3%) after the stock was initiated with an Outperform rating at RBC Capital Mkts.

[…]

U.S. Treasuries finished the session little changed. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield was unchanged at 0.68%. The U.S. Dollar Index increased 0.3% to 99.44. WTI crude increased another 1.3%, or $0.45, to $33.96/bbl.

[…]

• Initial claims for the week ending May 16 decreased by 249,000 to 2.438 million (Briefing.com consensus 2.400 million), bringing the 9-week total to 38.636 million. Continuing claims for the week ending May 9 surged by 2,525,000 to 25.073 million, which is an all-time high.
o The key takeaway from the report in the market’s mind is that the pace of initial claims is decelerating; however, the real-world takeaway is that the economic damage runs deep as initial claims and continuing claims keep piling up.
• Existing home sales plummeted 17.8% m/m in April to a seasonally adjusted annual rate of 4.33 million (Briefing.com consensus 4.32 million). That is the lowest level of home sales since July 2010.
o The key takeaway from the report is that sellers pulled listings amid the COVID-related downturn in demand, yet the inventory constraint translated into higher prices for buyers remaining in the market.
• The Conference Board’s Leading Economic Index decreased 4.4% m/m in April (Briefing.com consensus -5.3%) following a downwardly revised (and record) 7.4% decline (from -6.7%) in March.
o The key takeaway from the report is the Conference Board’s conclusion that the breadth and depth of the decline in the index does not imply a fast rebound for the economy at large, even with the imminent reopening of some sectors.
• The Philadelphia Fed Index for May increased to -43.1 (Briefing.com consensus -43.0) from the -56.6 reading in April.