The odds are for an up day with elevated volatility – watch for break below 2909.00 for change of fortune
Key economic data due:
CPI ( -0.8% vs. -0.7% est.; prev. -0.4%) at 8:30 AM
Core CPI ( -0.4% vs. -0.2% est.; prev. -0.1%) at 8:30 AM
Directional Bias Before Open:
Weekly: In Correction
Daily: In Correction
120-Min: Up
30-Min: Up-Side
15-Min: Up-Side
6-Min: Up
Key Levels:
Critical support levels for S&P 500 are 2929.77, 2921.42 and 2903.44
Critical resistance levels for S&P 500 are 2944.25, 2954.86 and 2985.93
Key levels for E-mini futures: break above 2937.00, the high of 1:30 PM on Monday and break below 2896.75, the low of 2:00 AM
Pre-Open
On Monday at 4:00 PM, S&P futures (June 2020) closed at 2922.25 and the index closed at 2930.32 – a spread of about -8.00 points; futures closed at 2922.75 for the day; the fair value is -0.50
Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +12.25; Dow by +133 and NASDAQ by +41.25
Markets Around The World
Markets in the East closed lower
European markets are mostly higher – France is down
Currencies:
Up
Down
EUR/USD
GBP/USD
AUD/USD
NZD/USD
Dollar index
USD/JPY
USD/CHF
USD/CAD
INR/USD
Commodities:
Up
Down
Crude Oil
Gold
Silver
Platinum
Palladium
Sugar
Cotton
NatGas
Copper
Coffee
Cocoa
Bond
10-yrs yield is at 0.713%, down from May 11 close of 0.726%;
30-years is at 1.412%, down from 1.445%
2-years yield is at 0.189% up from 0.181%
The 10-Year-&-2-Year spread is at 0.524 down from 0.545
VIX
Is at 26.35; down -1.22 from May 11 close; below 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-On
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 8 was a Bullish Engulfing candle with almost no upper shadow and small lower shadow;
Stochastic (9,1, 3): %K is above %D above 90
RSI (9) is turning up; above 50
The week was up +99.09 or +3.5%; the 5-week ATR is 180.60
The weekly week pivot point =2886.60, R1=2975.36, R2=3020.91; S1=2841.05, S2=2752.29; R1 pivot level was breached
An up week; third in last five weeks and fifth 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, and 89-week SMA
In Correction
Daily
A small green candle that is quite like a Harmai as its real body was slightly outside previous day’s real body; small upper and lower shadows
%K is above %D;
RSI-9 above 60; moving between 50 and 65 since April 6; above 8-day RSI;
Above 20-day EMA; above 50-day EMA; below 100-day SMA and 200-day SMA;
In Correction; uptrend since March 23
2-Hour (E-mini futures)
Visually the price-action is almost the same as that on Monday; moving up since 8:00 PM on May 3; just below the high of April 30; sequence of higher highs and higher lows since May 3, the fourth such sequence since the uptrend started; broke below a shallower uptrend line from March 23 lows
RSI-21 rising since 10:00 PM from near 40 to above 60
%K is above %D; above 80
Above EMA20, which is above EMA10 of EMA50
Bias: Up
30-Minute (E-mini futures)
An emerging W10 pattern of Arthur Merril’s M&W Wave patterns, which he says are slightly bearish in nature;
Rising since 2:00 AM from 2896.75 to near a resistance around 2937.00
RSI-21 rising since 11:00 PM from near 40 to near 60
%K is crisscrossing %D above 80
Above EMA20, which is above EMA10 of EMA50
Bias: Up-Side
15-Minute (E-mini futures)
Bollinger Band (20, 2.0) moving up since 2:00 AM
The Bollinger Band is expanding since 4:00 AM with price walking up the upper band
Stochastic (9, 1, 3): %K is crisscrossing %D lower from above 80
Bias: Up-Side
Previous Session
Major U.S. indices closed mostly lower on Monday, May 11 in mostly higher volume. S&P 500 and NASDAQ Composite closed higher. Dow Jones Transportation Average traded in lower volume. The day’s price range was relatively small. Most indices made Harami candlesticks.
The S&P 500 finished flat on Monday in a resilient session that started with the benchmark index down 0.9%. The Nasdaq Composite, powered by its mega-cap components, rose 0.8% while the Dow Jones Industrial Average (-0.5%) and Russell 2000 (-0.6%) closed lower.
[…]
U.S. Treasuries started the day little changed but steadily declined during the rebound in stocks. The 2-yr yield increased four basis points to 0.18%, and the 10-yr yield increased four basis points to 0.72%. The U.S. Dollar Index advanced 0.5% to 100.19. WTI crude lost 1.1%, or $0.25, to $24.46/bbl despite news that Saudi Arabia is planning to cut June output by an additional 1 million barrels per day.
