Morning Notes – Wednesday August 28, 2019

Directional Bias For The Day:

• S&P Futures are lower;
• The odds are for a down day with elevated volatility – watch for break above 2878.00 for change of fortune
• The 61.8% Fibonacci retracement of the big decline on Friday – from 2936.50 to 2810.25 – is achieved near 2888.00; the 78.6% Fibonacci retracement is near 2909.00 after a resistance level near 2901.00
• No key economic data due:

Markets Around The World

• • Markets in the East closed mixed – Shanghai, Hong Kong, Mumbai and Singapore closed down; Tokyo, Sydney and Seoul closed up
  • European markets are lower
  • Currencies:

• Commodities:
  

  Up	Down
  Crude Oil NatGas Gold (Unch.) Silver Copper Platinum Coffee Cotton	Palladium Sugar Cocoa

• Bonds
  • 10-yrs yield is at 1.463%, down from August 27 close of 1.490%;
  • 30-years is at 1.920%, down from 1.969%
  • 2-years yield is at 1.500%, down from 1.536%
  • The 10-Year-&-2-Year spread is at -0.037 up from -0.046
• VIX
  • Is at 21.24 up from August 27 close of 20.31; Above 5-day SMA 19.48
  • Recent high was 24.10 on August 15; recent low was 15.51 on August 21

Key Levels:

• Critical support levels for S&P 500 are 2867.41, 2860.59 and 2856.00
• Critical resistance levels for S&P 500 are 2875.79, 2881.28 and 2898.79
• Key levels for eMini futures: break above 2869.50, the high of 7:00 AM and break below 2854.25, the low of 8:00 AM

Pre-Open

• On Tuesday, at 4:00 PM, S&P future closed at 2868.00 and the index closed at 2879.16 – a spread of about -1.25 points; futures closed at 2865.50 for the day; the fair value is +2.50
• Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -3.75; Dow by -38 and NASDAQ by -15.75

Directional Bias Before Open

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

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

Previous Session

Major U.S. indices closed lower on Tuesday, August 27 in mostly higher volume that was lower than 10-day average. S&P 500 traded in lower volume. Most indices made bearish engulfing over small harami patterns with small shadows.

From Briefing.com:

The stock market finished lower on Tuesday in a shaky session. The S&P 500 jumped 0.7% out of the gate after yesterday’s advance, then declined as much 0.6% as Treasury yields took a noticeable leg lower. The broader market spent most of the afternoon wavering in negative territory, leaving the S&P 500 with a 0.3% loss.

The Dow Jones Industrial Average (-0.5%) and Nasdaq Composite (-0.3%) performed similarly to the benchmark index. The Russell 2000 dropped 1.4%, largely due to weakness in many of the energy and financial stocks.

[…]

Specifically, the 2s10s spread inversion widened to four basis points, which isn’t terribly conducive for lending activity. The 2-yr yield declined two basis points to 1.53%, and the 10-yr yield declined six basis points to 1.49%. The U.S. Dollar Index was little changed at 98.04. WTI crude rose 2.4% to $54.90/bbl.

[…]

• The Conference Board’s Consumer Confidence Index for August printed at 135.1 (Briefing.com consensus 129.6) versus an upwardly revised 135.8 (from 135.7) in July, which was the third highest reading since October 2000.
o The key takeaway from the report is that it reflects a pretty solid state of consumer confidence, which is a supportive foundation for continued discretionary spending. That matters greatly for an economy driven predominantly by consumer spending.
• The FHFA Housing Price Index for June increased 0.2% following a revised 0.2% increase in May (from 0.1%).
• The S&P Case-Shiller Home Price Index for June increased 2.1% (Briefing.com consensus of 2.7%) following a 2.4% increase in May.