The odds are for a sideways day elevated volatility – watch for break above 2948.00 and break 2930.75 for more clarity
A symmetrical triangle – flag – is appearing on 6-minute chart
Key economic data due:
Building Permits (1.07M vs. 1.00M est.; prev. 1.36M) at 8:30 AM
Housing Starts ( 0.89M vs. 0.95M est.; prev. 1.28M) at 8:30 AM
Directional Bias Before Open:
Weekly: In Correction
Daily: In Correction
120-Min: Up-Side
30-Min: Up-Side
15-Min: Up-Side
6-Min: Down-Side
Key Levels:
Critical support levels for S&P 500 are 2947.57, 2931.32 and 2913.86
Critical resistance levels for S&P 500 are 2952.65, 2869.09 and 2985.93
Key levels for E-mini futures: break above 2976.25, the high of 2:30 AM on May 18 and break below 2930.75, the low of 6:00 AM
Pre-Open
On Monday at 4:00 PM, S&P futures (June 2020) closed at 2946.25 and the index closed at 2953.91 – a spread of about -7.50 points; futures closed at 2948.00 for the day; the fair value is -1.75
Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were down by -8.50; Dow down by -46 and NASDAQ up by +4.75
Markets Around The World
Markets in the East closed up
European markets are mostly lower – Switzerland is up
Currencies:
Up
Down
EUR/USD
GBP/USD
USD/JPY
AUD/USD
NZD/USD
INR/USD
Dollar index
USD/CHF
USD/CAD
Commodities:
Up
Down
Crude Oil
NatGas
Gold
Silver
Copper
Platinum
Palladium
Cotton
Cocoa
Sugar
Coffee
Bond
10-yrs yield is at 0.736%, down from May 18 close of 0.744%;
30-years is at 1.452%, down from 1.458%
2-years yield is at 0.181% up from 0.173%
The 10-Year-&-2-Year spread is at 0.555 down from 0.571
VIX
Is at 29.56; up +0.22 from May 18 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-Neutral
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 15 was a red Harami candle with lower shadow double the size of the real body and upper shadow half of it; an indecisive candle with more upward bias than downward
Stochastic (9,1, 3): %K is above %D; turning down from above 90
RSI (9) is turning down; from just below 50
The week was down -66.10 or -2.3%; the 5-week ATR is 150.45
The weekly week pivot point =2858.72, R1=2950.80, R2=3037.90; S1=2771.62, S2=2679.54; S1 pivot level was breached
A down week; third in last five weeks and sixth 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; at/below 89-week SMA
In Correction
Daily
A green candle that gapped up at the open with no lower and small upper shadow; breaking above a resistance zone and 61.8% Fibonacci retracement
%K is above %D; above 90
RSI-9 is above 60; above 8-day RSI;
Above 20-day EMA and 50-day EMA; below 100-day SMA and 200-day SMA;
In Correction; uptrend since March 23
2-Hour (E-mini futures)
Broke above a Double Bottom pattern; at the upper bound of a Horizontal Channel; 61.8% extension target of the DB pattern is near 3055 and 100% extension target is near 3123.00
RSI-21 declining 10:00 AM on Monday; Bearish Divergence at 2:00 AM
%K is crisscrossing %D lower; below 20
Above EMA20, which is above EMA10 of EMA50
Bias: Up-Side
30-Minute (E-mini futures)
Drifting down since 2:30 AM;
Broke above an uneven Inverse Head-&-Shoulder pattern at 6:30 PM on Sunday; 100% extension target, near 2979.00, was almost achieved
RSI-21 is declining since 11:00 AM on Monday; Bearish Divergence at 2:30 AM; near 50 from above 75
%K is crisscrossing %D up
At/below EMA20; above EMA10 of EMA50
Bias: Up-Side
15-Minute (E-mini futures)
Bollinger Band (20, 2.0) moving sideways to down 1:30 PM on Monday;
The Bollinger Band expanded from 2:15 AM to 8:15 AM; narrowing since
Stochastic (9, 1, 3): %K is crisscrossing %D around 50
Uneven Head-&-Shoulder pattern is emerging; break below 2930.75 will complete the pattern with 61.8% extension target near 2902.00
Bias: Up-Side
Previous Session
Major U.S. indices closed higher on Monday, May 18 in mixed volume. Dow Jones Industrial Average and NASDAQ Composite traded in lower volume. Indices gapped up at the open and then traded higher. Most are near or breaking above a resistance.
The S&P 500 rallied 3.2% on Monday, as reopening hopes were fueled by a positive vaccine update from Moderna (MRNA 80.00, +13.31, +20.0%). The small-cap Russell 2000 outperformed with a 6.1% gain, followed by the Dow Jones Industrial Average (+3.9%) and Nasdaq Composite (+2.4%).
[…]
All 11 S&P 500 sectors finished higher, including leadership from the energy (+7.6%), industrials (+6.6%), and financials (+5.3%) sectors. Oil prices climbed 8.3%, or $2.44, to $31.82/bbl. Treasuries sold off, driving yields higher in a curve-steepening trade. The CBOE Volatility Index declined 8.0% to 29.33.
[…]
As mentioned, Treasury yields increased as safe-haven demand waned amid today’s bullish mindset. The 2-yr yield increased four basis points to 0.19%, and the 10-yr yield increased ten basis points to 0.74%. The U.S. Dollar Index declined 0.8% to 99.60.
Monday’s economic data was limited to the NAHB Housing Market Index for May, which increased to 37 (Briefing.com consensus 34) from 30 in April.
