Directional Bias For The Day:

• S&P Futures are lower at 9:00 AM; futures are drifting lower since 12:30 AM – down more than 25 points; breaking below a horizontal channel – the 61.8% extension target is near 4001.50, and the 100% extension target is near 3992.00
• The odds are for a down day with elevated volatility – watch for a break above 4027.25 and a break above 4041.50 for a change of sentiments.
• The major economic data report is due during the day.
  • Flash Service PMI ( 45.3 est.; prev. 44.7) at 9:45 AM
  • Flash Manufacturing PMI ( 46.0 est.; prev. 46.2) at 9:45 AM
  • Richmond Manufacturing Index ( -5 est; prev. 1) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4000.83, 3989.95, and 3961.37
• Critical resistance levels for S&P 500 are 3985.20, 3997.86=5, and 4014.16
• The key levels for E-mini futures are a break above 4027.25, the high at 8:30 AM, and a break below 4013.00, the low at 8:15 AM

Pre-Open

• On Monday at 4:00 PM, S&P futures (March 2023) closed at 4035.50, and the index closed at 4019.81 – a spread of about +15.75 points; the futures closed at 4036.50; the fair value is -1.00
• Pre-NYSE session open, futures were lower – at 8:45 AM, S&P 500 futures were down by -20.00, Dow by -152, and NASDAQ by -86.50

Markets Around The World

• Markets in the East closed higher – Shanghai, Hong Kong, Seoul, and Singapore were closed
• European markets are lower
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are mixed
  • Industrial metals are mostly lower
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.508, down -0.4 basis points from two weeks ago;
  • The 30-year is at 3.679%, up +2.9 basis points;
  • The 2-year yield is at 4.223%, up +0.7 basis points;
  • The 10-Year-&-2-Year spread is at -0.710, down from -0.699
  • The 30-Year-&-10-Year spread is at 0.166, up from 0.133
• VIX
  • At 20.06 @ 8:30 AM; up from the last close; below the 5-day SMA;
  • Recent high = 23.76 on January 3; low = 18.01 on January 13
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed higher on Monday, January 23, in mostly lower volume. Major indices opened up and traded higher until the afternoon before giving up some gains. All S&P sectors closed up.

From Briefing.com:

Equities logged sizable gains today, building on Friday’s rally. Upside moves had the S&P 500 extend its position above its 200-day moving average (3,966) and close the session comfortably above the 4,000 level. […] S&P 500 sector performance reflected mega cap leadership. The information technology (+2.3%), communication services (+1.8%), and consumer discretionary (+1.6%) sectors led the outperformers. The energy sector, meanwhile, was alone in negative territory by the close with a 0.2% loss. […] The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average were up 1.7%, 2.4%, and 1.2%, respectively, at their highs of the day. […] Nasdaq Composite: +8.6% YTD Russell 2000: +7.4% YTD S&P Midcap 400: +6.6% YTD S&P 500: +4.7% YTD Dow Jones Industrial Average: +1.5% YTD […]