US Indices on Tuesday's close: SPX: (+0.47%), NDX: (+0.91%), Dow: (+0.68%) and RUT: (+0.18%)
SPX/SPY gapped over the aforementioned poc on the open, fell down to that level it by mid-session and bounced. GOOG bounced too. SPX followed the same pattern as ES and closed at 2737.70, a few points below its 200 day average. NDX led the action and also closed below the 200 day average and just over the 61.8% retracement of the downtrend. Dow is in thin air above all moving averages and the RUT managed to close just over its 100 day.
The ES futures struggled a bit with 2729 then passed through to make a single print high of 2737.00 on neutral NYSE and slightly above neutral NASD breadth. As the index approached the 200 day average, buying exhaustion set in and price has pulled back as US treasuries caught a bid. ES pulled back to make an RTH session low of 2722.25 before climbing back again to make a high of 2737.75 and retreated to close at 2731.25, leaving a fairly balanced profile.
The ISM Non-Manufacturing Index softened to 56.7% in January from 58% (upward revision) in December. This is thought to have been impacted by the US government shutdown. GBP/USD (-0.71%) fell throughout the session and the DAX closed over its 2011 based trend line with a little more gusto than last time. DXY at 96.083 (+0.24%) touched but fell back from its 100 day average and February gold settled at $1319.05/oz or (+0.10%). Oil took another breather today and CLH19 is currently trading at … after February light crude settled at $53.75/bbl or (-1.6%) while WSJ reports that OPEC is trying to get a pact with Russia to put a floor under oil prices.
Market Internals: NYSE A-D lines: +733. NYSE breadth:+1.64:1 and NASD breadth: +1.55:1. NYSE cumulative TICK: positive but muted with an advance into the close. TRIN:1.03. NYSE MOC: A strong buy from well before the reveal showed an early +1.7B imbalance leading to +2.215B to buy at the reveal and a finish of +512M. NASD buy was also strong. SPX volume: 2.146B. SPX composite volume: +4.38%. NYSE composite volume: +5.98% and NYSE total volume: +6.26%. Implied Volatility: VIX: 15.57 or -1.02%, VXG19: 16.53 or +0.03% and VXH19: 16.96 or-0.67%.
Debt: US Treasuries had an up day with added interest at the end of the Treasury note auction below.
A 38B 3-year note auction at mid-session: High yield: 2.502% (when issued yield: 2.505%) (vs 2.670% 12 auction average); Bid to cover: 2.55 ( vs 2.70); Indirect bid: 45.7% (vs 46.8%); Direct bid: 18.5% (vs 10.6%). The 2-year (-1 bp to 2.52%) to 10-year (-2 bps to 2.70%) spread is 18 bps and the 2-year to 30-year (-3 bps to 3.04%) is now 52 bps. Related news: 12:59 ET: Fed's Kaplan says the Fed should do nothing until there is greater clarity on economic conditions.
News: The US Treasury Secretary and other US trade representatives will hold talks in Beijing next week via Dow Jones Newswires.
Yesterday's news continues to get coverage: the ever unflappable SDNY is investigating - among other things - if foreign nationals helped the president's inaugural committee. Watch that closely because unlike some politicians, these men and women don't play around. During the tonight's SOU speech, the president is reported not to be planning to declare a national emergency vis the border wall. The message is thought to contain collegial references but you know there will be some entertainment as well. Have fun trading today!
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