Directional Bias For The Day:

• S&P Futures are lower at 9:00 AM; drifting lower since 7:30 AM; the down pressure increased following the ADP report and Unemployment Claims; broke below an uptrend line on the intraday chart
• The odds are for a down day with elevated volatility – watch for a break above 3879.75 for a change of sentiments
• The major economic data report is due during the day:
  • ADP non-Farm Employment Change ( 235K vs. 152K est.; prev. 182K) at 8:15 AM
  • Unemployment Claims ( 204K vs. 230K est.; prev. 223K) at 8:30 AM
  • Trade Balance ( -61.5B vs. -64.2B est.; prev. -77.8B) at 8:30 AM
  • Final Services ( 44.4 est.; prev. 44.4) at 9:45 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3815.77, 3794.33, and 3780.78
• Critical resistance levels for S&P 500 are 3827.32, 3854.30, and 3868.71
• The key levels for E-mini futures are a break above 3879.75, the high at 8:00 AM, and a break below 3836.50, the low at 10:00 AM on Wednesday

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (March 2023) closed at 3873.75, and the index closed at 3852.97 – a spread of about +20.75 points; the futures closed at 3874.50; the fair value is -0.75
• Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by –26.75, Dow by -212, and NASDAQ by -86.00

Markets Around The World

• Markets in the East closed mostly higher – Mumbai was down
• European markets are mostly lower – Spain is higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower
  • Precious metals are mixed
  • Industrial metals are mostly higher
  • Soft commodities are mostly lower
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.709, up +2.5 basis points from two weeks ago;
  • The 30-year is at 3.820%, up +7.7 basis points;
  • The 2-year yield is at 4.345%, up +11.8 basis points;
  • The 10-Year-&-2-Year spread is at -0.636, down from -0.543
  • The 30-Year-&-10-Year spread is at 0.111, down from 0.059
• VIX
  • At 22.52 @ 9:00 AM; up from the last close; above the 5-day SMA;
  • Recent high = 24.30 on December 22; low = 19.94 on December 21
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed higher on Wednesday, January 4, in higher volume. The major indices are moving within a relatively narrow range for the past few days. Moving sideways since December 16, 2022. All but one S&P sector – Energy – closed higher.

From Briefing.com:

[…] The major indices registered some decent gains at their highs for the session, but closed a good bit off their best levels of the day; however, a rally effort in the last 10 minutes saved them from a negative finish. […] Advancers led decliners by a 4-to-1 margin at the NYSE and a greater than 2-to-1 margin at the Nasdaq. The Invesco S&P 500 Equal Weight ETF (RSP) was up 1.6% versus a 0.5% gain in the Vanguard Mega Cap Growth ETF (MGK) and a 0.8% gain in the S&P 500. […] All 11 S&P 500 sectors were able to register a gain with real estate (+2.3%) and materials (+1.7%) leading the outperformers. Meanwhile, the energy (+0.1%), health care (+0.3%), and information technology (+0.3%) sectors fell to the bottom of the pack. The 2-yr Treasury note yield settled the session unchanged at 4.37% while the 10-yr note yield fell seven basis points to 3.71%. Dow Jones Industrial Average: 0.2% YTD S&P Midcap 400: +0.8% YTD S&P 500: +0.2% YTD Russell 2000: +0.7% YTD Nasdaq Composite: -0.4% YTD [..] The MBA Mortgage Applications Index for the week ending December 31 fell 13.2% from two weeks earlier with purchase applications declining 12.2% and refinancing applications falling 16.3%. The December ISM Manufacturing Index dropped to 48.4% (Briefing.com consensus 48.5%) from 49.0% in October. The dividing line between expansion and contraction is 50.0%, so the sub-50.0% reading for December reflects a general contraction in manufacturing activity. The ISM for December hit its lowest level since May 2020, and marks the second straight month with a sub-50.0% reading. […] JOLTS – Job Openings increased to 10.458 million in November from a revised total of 10.512 million in October (from 10.334 million). […] Overseas:  Europe: DAX +1.3%, FTSE +0.3%, CAC +1.3% Asia: Nikkei -1.5%, Hang Seng +3.1%, Shanghai +0.2% Commodities:  Crude Oil -4.00 @ 72.97 Nat Gas +0.08 @ 3.76 Gold +14.10 @ 1857.10 Silver -0.29 @ 23.89 Copper -0.03 @ 3.73 […]