Directional Bias For The Day:

• S&P Futures are little changed at 9:15 AM; moving sideways s4:00 PM on Wednesday within a narrow band between 4030.00 and 4003.50
• Day after Fed funds rate increase has been bearish for the past many months
• The odds are for sideways to a down with elevated volatility – watch for a break above 4030.50 and a break belwo4003.50 for clarity
• The key economic data report due during the day:
  • Advanced GDP ( -0.9% vs. 0.4% est.; prev. -1.6%) at 8:30 AM
  • Advanced GDP Price Index ( 8.7% vs. 7.9% est.; prev. 8.2%) at 8:30 AM
  • Unemployment Claims ( 256K vs. 253K est.; prev. 261K) at 8:30 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4004.63, 3995.93, and 3967.15
• Critical resistance levels for S&P 500 are 4039.56, 4069.04, 4086.23
• Key levels for E-mini futures: break above 4030.00, the high at 8:45 AM and a break below 4003.50, the low at 8:30 AM

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (September 2022) closed at 4024.00,  and the index closed at 4023.61 – a spread of about +0.75 points; the futures closed at 4024.50; the fair value is -0.50
• Pre-NYSE session open, futures are a bit lower – at 9:00 AM, S&P 500 futures were down by -6.00, Dow by -40; and NASDAQ by -40.50

Markets Around The World

• Markets in the East closed mostly higher – Hong Kong closed down
• European markets are mixed – Germany, the UK, and Spain are lower; France, Italy, Switzerland, and STOXX 600 are higher
• 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 higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 2.745%, down -15.9 basis points from two weeks ago;
  • The 30-year is at 3.066%, down -0.3 basis points;
  • The 2-year yield is at 3.024%, down -12.9 basis points;
  • The 10-Year-&-2-Year spread is at -0.279, up from -0.249
  • The 30-Year-&-10-Year spread is at 0.321, up from 0.165
• VIX
  • At 23.15 @ 8:15 AM; down from the last close; above the 5-day SMA;
  • Recent high = 29.06 on July 13; low = 22.41 on July 22
  • Sentiment: Risk-On

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

Previous Session

Major U.S. indices closed higher on Wednesday, July 27, in higher volume. The major indices gapped up at the open. They then traded sideways up until the FOMC press conference before advancing more in the late trading session. Most are making Rising Three Method candlestick patterns.

From Briefing.com:

[…] The main indices stuck to a fairly narrow range as market participants waited for the FOMC decision. There was some whipsaw action immediately after the rate hike announcement but the market moved sharply higher during Chairman Powell’s subsequent press conference. Each of the indices closed near session highs. […] The Vanguard Mega Cap Growth ETF (MGK) closed up 4.3% versus a 2.6% gain in the S&P 500 and a 1.9% gain in the Invesco S&P 500 Equal Weight ETF (RSP). The late-session rally left all 11 S&P 500 sectors in positive territory. Gains ranged from 0.1% (utilities) to 5.1% (communication services). […] The 2-yr note yield fell four basis points to 3.00% while the 10-yr note yield fell five basis points to 2.73%. […] WTI crude oil futures rose 2.8% to $97.54/bbl. Natural gas futures fell 2.0% to $8.57/mmbtu. Unleaded gasoline futures rose 2.7% to $3.19/gal. […] Weekly MBA Mortgage Applications Index -1.8%; Prior -6.3% June Durable Orders 1.9% (Briefing.com consensus -0.5%); Prior was revised to 0.8% from 0.7%; June Durable Orders, Ex-Transportation 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.5% from 0.7% […] June Adv. Retail Inventories 2.0%; Prior was revised to 1.6% from 1.1% June Adv. Wholesale Inventories 1.9%; Prior was revised to 1.9% from 2.0% June Adv. Intl. Trade in Goods -$98.2 bln; Prior was revised to -$104.0 bln from -$104.3 bln June Pending Home Sales -8.6% (Briefing.com consensus -1.5%); Prior was revised to 0.4% from 0.7% […] Dow Jones Industrial Average: -11.4% YTD S&P 400: -13.9% YTD S&P 500: -15.6% YTD Russell 2000: -17.6% YTD Nasdaq Composite: -23.1% YTD Overseas:  Europe: DAX +0.5%, FTSE +0.6%, CAC +0.8% Asia: Nikkei +0.2%, Hang Seng -1.1%, Shanghai -0.1% Commodities:  Crude Oil +2.62 @ 97.54 Nat Gas -0.18 @ 8.56 Gold +10.40 @ 1725.80 Silver +0.23 @ 18.77 Copper +0.06 @ 3.44