Directional Bias For The Day:

• S&P Futures are higher; moving higher since 7:30 PM on Thursday;
• Daily and weekly trend is down
• Odds are for an up day with choppiness and elevated volatility – watch for break below 2470.75 for change of fortune;
• Key economic data due:
  • Non-Farm Employment Change (312K vs. 179K; 155K Prev.) at 8:30 AM
  • Average Hourly Earnings (0.4% vs. 0.3% est.; 0.2% prev.) at 8:30 AM
  • Unemployment Rat (3.9% vs. 3.7% est.; 3.7% prev.) at 8:30 AM

Markets Around The World

• Markets in the East closed mostly up – Tokyo and Sydney closed down
• European markets are higher
• Currencies:
  

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

• Commodities:
  

  Up	Down
  Crude Oil NatGas Silver Copper Platinum Palladium Sugar Cotton	Gold Coffee Cocoa

• Bonds
  • 10-yrs yield is at 2.621%, down from January 3 close of 2.625%;
  • 30-years is at 2.947%, down from 2.949%
  • 2-years yield is at 2.459%, up from 2.696%
  • The 10-Year-&-2-Year spread is at 0.162, down from 0.168

Key Levels:

• Critical support levels for S&P 500 are 2443.96, 2397.94 and 2346.58
• Critical resistance levels for S&P 500 are 2488.04, 2495.01 and 2519.49
• Key levels for eMini futures: break above 2486.75, the high of 6:00 AM and break below 2470.75, the low of 8:30 AM

Pre-Open

• On Thursday, at 4:00 PM, S&P future (January contract) closed at 2448.25 and the index closed at 2447.89 – a spread of about +0.25 points; futures closed at 2447.75 for the day; the fair value is -0.50
• Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +25.25; Dow by +239; and NASDAQ by +77.25

Directional Bias Before Open

• Weekly: Down
• Daily: Down
• 120-Min: Side
• 30-Min: Down-Side
• 15-Min: Side-Up
• 6-Min: Up

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

Previous Session

Major U.S. indices closed lower on Thursday January 3. The volume was higher than on Wednesday but lower than 10-day average.

Major indices gapped down at the open from previous close and opened near the middle of the real-body of Wednesday and then closed below its low. A break below Thursday’s low will be bearish and a break above its high will continue the bounce that started on December 26.

From Briefing.com:

The S&P 500 dropped 2.5% on Thursday, as a revenue warning from Apple (AAPL 142.19, -15.73, -10.0%) and weak manufacturing data stoked worries about a slowdown in global economic growth. The Dow Jones Industrial Average lost 2.8%, the Nasdaq Composite lost 3.0%, and the Russell 2000 lost 1.8%.

Nine of the 11 S&P 500 sectors finished in the red. The heavily-weighted information technology sector led the retreat with a loss of 5.1%, as Apple dragged on the group with a steep loss of 10.0%, which sent the stock to a level not seen since mid-2017. The industrials (-3.0%) and materials (-2.8%) sectors also underperformed the broader market.

[…]

Fears over growth and corporate earnings had investors flocking to risk-free U.S. Treasuries. Consequently, the 2-yr yield and 10-yr yield fell 11 basis points each, to 2.38% and 2.55%, respectively. The rally in Treasuries took place amid building expectations for a rate cut by the end of the year. The fed funds futures market now sees a 46.1% implied likelihood of a rate cut in December, up sharply from yesterday’s implied probability of just 9.6%. The U.S. Dollar Index lost 0.6% to 96.23.

[…]

• The ISM Manufacturing Index for December decreased to 54.1% (Briefing.com consensus 57.8%) from 59.3% in November.
o The key takeaway from the report is that the December decrease was fueled by a sharp pullback in the New Orders component, which is the same element that lifted the November ISM Manufacturing Index into the neighborhood of its high from 2018.

• S&P 500 Sectors