US Indices on Wednesday's close: SPX: (+0.22%), NDX: (-0.02%), Dow: (+0.59%) and RUT: (+0.66%)
The Financial sector (+2.20%) led an otherwise flattish tape with Real Estate, Materials, Utilities, Industrials and Technology above the neutral line while Consumer Staples, Communication Services, Health Care, Consumer Discretionary and Energy were relatively weak.
ES overnight session is now underway. Tuesday's overnight session was balanced but compressed and interest was net long coming into the RTH session -- which was also compressed as the market consolidated over the 2603 resistance that it took so long to break through and has become important short term support. ES made a high of 2626.25 and has a current point of control at 2618. NYSE breadth stayed above the neutral line and implied volatility is kind of stable while CBOE SKEW has been rising lately.
Major near term support is 2580 and support converges at 2595. There is not much intraday resistance over that and a push above 2620 would put 2640 into play. The resistance there can be found on the daily chart in the form of technicals. The bulls are interested in 2643, because it gets the SPX into a floor that it tested on 10 Dec. and broke through again on 14 Dec.
The equity market appears to be running on fumes here in the absence of strong, short term catalysts but today most Treasury notes were sold with the long bond being the exception until late in the day. February Gold settled up at 1293.60/oz or (+0.4%) and is still consolidating along the retrace line as it takes advantage of a neutral USD (96.076 or +0.04%).
Market Internals
NYSE A-D lines: +717. NYSE breadth: +1.63:1 and NASD breadth: +1.09:1. NYSE cumulative TICK: positive but flatter than yesterday. TRIN: 1.02. NYSE MOC: +425M to buy. Financials led that buy followed by Health Care, Consumer Services, Utilities and Tech. SPX volume: 2.417B. SPX composite volume: +4.58%. NYSE composite volume: +7.37% and NYSE total volume: -0.81%. Implied Volatility: VIX: 19.04 or +2.37%, VXF19: 18.30 or -3.02% and VXG19: 18.85 or -0.92%.
Debt
A big shot of liquidity from PBOC saw US treasuries lower overnight and the main outlier during the cash session was the 30-year treasury which later gave up its gains. The 2-year (+2 bps to 2.54%) to 10-year (+2 bps to 2.73%) spread is still 19 bps while the 2-year to 30-year (+1 bp to 3.08%) spread is now 54 bps.
Incoming
All data tomorrow is low impact. Weekly Initial and Continuing Claims as well as the Philadelphia Fed Index for January are out at 08:30 ET and EIA Natural Gas Inventories are out at 10:30 ET. Hope you all have a good day.
(20min delay)
