Directional Bias For The Day:

• S&P Futures are lower at 8:45 AM; drifting up since 4:45 AM after making a Double Bottom at 3910.00
• The odds are for a down day with elevated volatility; a good chance of a sideways to up move from the pre-open levels around 3930.00 – watch for a break below 3922.00 and a break above 3938.00 for clarity
• The key economic data report due during the day:
  • Flash Manufacturing PMI ( 57.6 est.; prev.59.2) at 9:45 AM
  • Flash Services PMI ( 55.1 est.; prev. 55.6) at 9:45 AM
  • New Home Sales ( 751K est.; prev. 763K) at 10:00 AM
  • Richmond Manufacturing Index ( 9 est.; prev. 14) at 10:00 AM
  • Fed Chair Powell speak at 12:20 PM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 39333.34, 3909.04, and 3903.89
• Critical resistance levels for S&P 500 are 3946.11, 3981.88, and 4013.73
• Key levels for E-mini futures: break above 3938.50, the high at 7:30 AM and a break below 3922.00, the low at 8:00 AM

Pre-Open

• On Monday at 4:00 PM, S&P futures (June 2022) closed at 3972.00 and the index closed at 3973.75 – a spread of about -1.75 points; futures closed at 3971.75 for the day; the fair value is +0.25
• Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -44.00; Dow by -19; and NASDAQ by -217.50

Markets Around The World

• Markets in the East closed lower
• European markets are lower
• Currencies (Compared to two weeks ago):
  

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

• Commodities (Compared to two weeks ago):
  • Energy futures are higher
  • Precious metals are lower
  • Industrial metals are mostly higher
  • Soft commodities are mixed
• Treasuries (Compared to two weeks ago)
  • 10-years yield closed at 2.812%, down -26.7 basis points from two weeks ago;
  • 30-years is at 3.011%, down -19.7 basis points;
  • 2-years yield is at 2.608%, up +0.2 basis points;
  • The 10-Year-&-2-Year spread is at 0.204, down from 0.473
  • The 30-Year-&-10-Year spread is at 0.199, up from 0.129
• VIX
  • At 29.40 @ 8:00 AM; up from the last close; below the 5-day SMA;
  • Recent high = 35.48 on May 9; low = 25.51 on May 17
  • Sentiment: Risk-Off
  • Forming a symmetrical triangle since April 25

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

Previous Session

Major U.S. indices closed higher on Monday, May 23, in lower volume.

Most major indices made three-day Morning Stars patterns at support levels. Most gapped up at the open and then for most of the day traded higher. All S&P sectors closed higher.

From Briefing.com:

There were no Monday blues for the stock market. Instead, stock monitors were generally awash in green figures as market participants succeeded in maintaining the momentum of Friday’s late rebound effort. […] The Russell 3000 Value Index was up 1.5% and the Russell 3000 Growth Index was also up 1.5%. All 11 S&P 500 sectors closed in positive territory. The financial sector (+3.2%), bolstered by JPMorgan Chase’s guidance and some value hunting, led the way. It was joined at the top of the performance table by the energy (+2.7%), information technology (+2.4%), and consumer staples (+2.1%) sectors. […] The 2-yr note yield settled up three basis points at 2.61% while the 10-yr note yield ended up seven basis points at 2.86%. […] The U.S. Dollar Index fell 1.0% to 102.09. WTI crude futures settled the session up 0.2% at $110.31/bbl while natural gas futures spiked 7.9% to $8.84/mmbtu. […] Dow Jones Industrial Average -12.0% YTD S&P 500 -16.6% YTD Russell 2000 -20.4% YTD Nasdaq Composite -26.3% YTD Overseas:  Europe: DAX +1.4%, FTSE +1.7%, CAC +1.2% Asia: Nikkei +1.0%, Hang Seng +0.0%, Shanghai -1.2% Commodities:  Crude Oil +0.25 @ 110.30 Nat Gas +0.65 @ 8.80 Gold +9.50 @ 1849.90 Silver +0.13 @ 21.68 Copper +0.06 @ 4.31