Morning Notes – Friday April 5, 2019

Directional Bias For The Day:

• S&P Futures are higher; moving sideways since 10:00 PM on April 2 within a narrow range between 2889.00 and 2874.00;
• Awaiting the Non-Farm Payroll report, which will set the tone for the rest of day’s trading
• The bias is to the upside and break above 2889.00 will be bullish; similarly a break below 2874.00 will be bearish
• Key economic data due:
  • Non-Farm Employment ( est. 172K; prev. 20K) at 8:30 AM
  • Average Hourly Earnings ( est. 0.3%; prev. 0.4%) at 8:30 AM
  • Unemployment Rate ( est. 3.8%; prev. 3.8%) at 8:30 AM

Markets Around The World

• Markets in the East closed mostly higher – Sydney closed down; Shanghai and Hong Kong were closed for trading
• European markets are mostly higher – Spain and Switzerland are down
• Currencies:
  

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

• Commodities:
  

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

• Bonds
  • 10-yrs yield closed at 2.512%, down from April 3 close of 2.517%;
  • 30-years is at 2.922%, down from 2.929%
  • 2-years yield is at 2.335%, down from 2.339%
  • The 10-Year-&-2-Year spread is at 0.17, down from 0.178

Key Levels:

• Critical support levels for S&P 500 are 2867.14, 2858.75 and 2848.63
• Critical resistance levels for S&P 500 are 2881.28, 2886.02 and 2904.47
• Key levels for eMini futures: break above 2888.50, the high of 2:30 AM and break below 2880.75, the low of 7:30 PM on Thursday

Pre-Open

• On Thursday, at 4:00 PM, S&P future (June contract) closed at 2883.00 and the index closed at 2879.39 – a spread of about +3.50 points; futures closed at 2882.75 for the day; the fair value is +0.25
• Pre-NYSE session open, futures are higher – at 7:00 AM, S&P 500 futures were up by +4.75; Dow by +31 and NASDAQ by +16.00

Directional Bias Before Open

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

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

Previous Session

Major U.S. indices closed mostly higher on Thursday, April 4 in subdued trading with lower volume. NASDAQ Composite closed lower. The day’s range was small and the price action reflected the pause before Friday’s payroll report.

From Briefing.com:

The S&P 500 increased 0.2% on Thursday, wavering between small gains and losses as high-level trade talks continued in Washington. The benchmark index advanced for the sixth straight session, eking out a new closing high for the year.

The Dow Jones Industrial Average gained 0.6%, boosted by shares of Boeing (BA 395.86, +11.12, +2.9%) on reports of a successful test of the software fix for the 737 MAX plane, which could be implemented in the coming weeks. The small-cap Russell 2000 gained 0.4%, while the tech-sensitive Nasdaq Composite lost 0.1%.

The S&P 500 materials (+1.0%), energy (+0.9%), and consumer discretionary (+0.7%) sectors led the broader market higher. Conversely, the information technology (-0.4%), utilities (-0.4%), and real estate (-0.3%) sectors underperformed.

[…]

U.S. Treasuries finished mixed ahead of Friday’s release of the Employment Situation report for March. The 2-yr yield increased one basis point to 2.33%, and the 10-yr yield decreased one basis point to 2.51%. The U.S. Dollar Index increased 0.2% to 97.26. WTI crude lost 0.3% to $62.24/bbl.

[…]

• Initial claims for the week ending March 30 decreased by 10,000 to 202,000 (Briefing.com consensus 217,000) while continuing claims for the week ending March 23 fell by 38,000 to 1.717 million.
o The key takeaway from the report is that it suggests employers are reluctant to let go of employees. That is a positive consideration in terms of the economic outlook since feelings of job security help fuel increased consumer spending activity.

• S&P 500 Sectors