Morning Notes – Tuesday April 9, 2019

Directional Bias For The Day:

• S&P Futures are flat; moving sideways since 4:00 PM on Monday; within a trading range between 2899.50 and 2884.25 for past two days;
• The odds are for a sideways to an up day – watch for break above 2900.00 and break below 2884.25 for clarity
• No key economic data due:

Markets Around The World

• Markets in the East closed mostly higher – Shanghai was lower
• European markets are mostly higher – Germany is down
• Currencies:
  

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

• Commodities:
  

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

• Bonds
  • 10-yrs yield closed at 2.519%, up from April 5 close of 2.501%;
  • 30-years is at 2.925%, up from 2.909%
  • 2-years yield is at 2.364%, up from 2.343%
  • The 10-Year-&-2-Year spread is at 0.155, down from 0.158

Key Levels:

• Critical support levels for S&P 500 are 2890.17, 2884.64 and 2880.78
• Critical resistance levels for S&P 500 are 2895.77, 2904.47 and 2909.64
• Key levels for eMini futures: break above 2900.00, the high of 8:00 PM on Monday and break below 2893.25, the low of 2:00 AM

Pre-Open

• On Monday, at 4:00 PM, S&P future (June contract) closed at 2898.75 and the index closed at 2895.77 – a spread of about +3.00 points; futures closed at 2898.25 for the day; the fair value is +0.50
• Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -7.25; Dow by -57 and NASDAQ by -20.75

Directional Bias Before Open

• Weekly: Uptrend
• Daily: Uptrend
• 120-Min: 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 Monday, April 8 in another subdued trading with mostly lower volume. Dow Jones Industrial Average and Russell 2000 closed lower. Dow Jones Transportation Average traded in higher volume. The major indices are showing mostly an up bias and the volatility index, $VIX, is at 13.40, which indicate that the current grind up would continue.

From Briefing.com:

The S&P 500 declined as much as 0.4% in the opening minutes of trading on Monday, weighed down by shares of widely-held stocks like Boeing (BA 374.52, -17.41, -4.4%) and General Electric (GE 9.49, -0.52, -5.2%). The benchmark index, however, staged a steady rebound throughout the day to extend its winning streak to eight straight sessions. The S&P 500 finished higher by 0.1%.

The Nasdaq Composite increased 0.2%, while the Dow Jones Industrial Average lost 0.3%. The decline in the Dow can predominately be attributed to Boeing, which announced it will temporarily cut production of its 737 Max aircraft by approximately 20%.

[…]

Oil prices ($64.39/bbl, +1.29, +2.0%) were also in focus after breaking out to fresh five-month highs on Monday. The move higher was supported by ongoing concerns stemming from the military conflict in OPEC producer Libya. The S&P 500 energy sector increased 0.5% and was a consistent leader throughout the day.

[…]

U.S. Treasuries finished slightly lower to begin the week, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased two basis points each to 2.36% and 2.52%, respectively. The U.S. Dollar Index declined 0.4% to 97.04.

Reviewing Monday’s lone economic report, Factory Orders for February:
• Factory orders declined 0.5% in February (Briefing.com consensus -0.6%) on the heels of a downwardly revised 0.0% reading (from +0.1%) in January. This marked the fourth decline in the last five months for new orders for manufactured goods.
o The key takeaway from the report is that business investment was soft in February, evidenced by the 0.1% decline in orders for nondefense capital goods excluding aircraft. Shipments of those same goods, though, increased 0.4%, which will be a positive input for Q1 GDP forecasts.

• S&P 500 Sectors