Morning Notes – Wednesday March 20, 2019

Directional Bias For The Day:

• S&P Futures are unchanged; moving  down since 4:30 AM
• Odds are for a down to sideways day – watch for break above 2842.50 for change of fortune
• Key economic data due:
  • FOMC Statement at 2:00 PM
  • FOME Economic Projections at 2:00 PM
  • Fed Funds Rate at 2:00 PM
  • FOMC Press Conference at 2:30 PM

Markets Around The World

• Markets in the East closed mostly down – Tokyo and Mumbai closed up
• European markets are mostly lower – U.K. and Italy are up
• Currencies:
  

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

• Commodities:
  

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

• Bonds
  • 10-yrs yield is at 2.591%, down from March 19 close of 2.614%;
  • 30-years is at 3.050%, down from 3.028%
  • 2-years yield is at 2.458%, down from 2.470%
  • The 10-Year-&-2-Year spread is at 0.133, down from 0.144

Key Levels:

• Critical support levels for S&P 500 are 2823.27, 2818.26 and 2810.79
• Critical resistance levels for S&P 500 are 2842.65, 2852.42 and 2856.32
• Key levels for eMini futures: break above 2839.25, the high of 8:00 AM and break below 2833.25, the low of 8:30 AM

Pre-Open

• On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2840.00 and the index closed at 2832.57 – a spread of about +7.50 points; futures closed at 2836.50 for the day; the fair value is +3.50
• Pre-NYSE session open, futures price action is mixed – at 8:45 AM, S&P 500 futures were down by -0.25; Dow up by +5; and NASDAQ up by +2.75

Directional Bias Before Open

• Weekly: Uptrend
• Daily: Up Under Pressure
• 120-Min: Up-Side
• 30-Min: Down-Side
• 15-Min: Side
• 6-Min: Side-Down

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

Previous Session

Major U.S. indices closed mostly lower on Tuesday, March 19 in mostly higher volume. NASDAQ Composite closed up slightly and Russell 2000 traded in lower volume. The early session’s lack-luster trading decidedly turned negative mid-day and then major indices mostly traded down.

From Briefing.com:

The S&P 500 advanced as much as 0.7% on Tuesday, bolstered by dovish expectations ahead of the Federal Reserve’s policy decision on Wednesday. Conflicting U.S-China trade headlines, however, induced some profit-taking interest after a recent stretch of gains, as did a late-day slide in oil prices, which hit their highs for the year earlier in the session. The S&P 500 was down as much as 0.3% but managed to close near its flat line.

The Dow Jones Industrial Average (-0.1%) and the Russell 2000 (-0.6%) finished lower after being up as much as 0.8% and 0.5%, respectively. The Nasdaq Composite finished higher by 0.1% after being up as much as 0.7%.

The S&P 500 utilities (-1.2%), financials (-0.8%), and industrial (-0.4%) sectors underperformed the broader market. Conversely, the health care (+0.8%), consumer discretionary (+0.5%), and information technology (+0.2%) sectors were the lone groups to finish with gains.

[…]

U.S. Treasuries closed on a lower note, pushing yields slightly higher. The 2-yr yield and the 10-yr yield increased one basis point each to 2.46% and 2.61%, respectively. The U.S. Dollar Index declined 0.2% to 96.37. WTI crude increased 0.1% to $59.34/bbl.

Reviewing Tuesday’s lone economic report, Factory Orders for January:
• Factory orders increased 0.1% in January (Briefing.com consensus +0.2%) on the heels of an unrevised 0.1% increase in December.
o The key takeaway from the report is that business investment picked up, evidenced by a 0.8% increase in orders for nondefense capital goods excluding aircraft that followed a 0.8% decline in December. Shipments of those same goods also increased 0.8% in January, which will be a positive input for Q1 GDP forecasts.

• S&P 500 Sectors