Overnight Recap 1/22/2019


European and Asian stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Some risk aversion has creeped back into the marketplace this week. U.S. stock and financial markets were closed for a federal holiday on Monday.

There are renewed worries about slowing global economic growth, as the International Monetary Fund released a report Monday that projected collective world economic growth at 3.5% in 2019, which is down from their last forecast in October for 3.7% growth. The IMF also warned about higher risks for sharper declines in world economic growth.

Meantime, China on Monday reported its economic growth rate in 2018 at 6.6%, which is the lowest level in 29 years.

Germany, the economic driver of the European Union, reported more dour economic data today, with its ZEW economic expectations index weakening in January, along with its current conditions index.

The U.S. government remains in partial shut-down mode with no agreement between the Democrats and President Trump to reopen it imminent. This is starting to drag on the U.S. economy, including the lack of fresh economic news to help drive many markets.

The important outside markets today see the U.S. dollar index trading slightly higher. Meantime, Nymex crude oil prices are lower and trading around $53.00 a barrel.

The World Economic Forum is being held this week in Davos, Switzerland. Movers and shakers from around the world are there, but the U.S. has backed its government officials out due to the government shutdown.

U.S. economic data due for release Tuesday includes existing home sales.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower on a corrective pullback after hitting a four-week high last Friday. Prices are still in an uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at last week’s high of 2,677.75 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,632.75 and then at 2,615.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are lower in early U.S. trading, on a corrective pullback after hitting a four-week high last Friday. Prices are still in an uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 6,800.00 and then at last week’s high of 6,828.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,700.00 and then at 6,650.00. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher in early U.S. trading today. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 145 16/32 and then at 145 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 144 9/32 and then at 144 even. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the overall chart advantage but are fading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 121.17.5 and then at 121.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.05.0 and then at last week’s low of 121.02.0. Sell stops likely reside just below those levels.

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher in early U.S. trading. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.140 and then at 96.500. Shorter-term support is seen at 95.665 and then at 95.480.
NYMEX CRUDE OIL

March Nymex crude oil prices are lower in early U.S. trading after hitting a six-week high overnight. Prices are still in an uptrend on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $54.51 and then at $55.00. Look for sell stops just below technical support at $52.50 and then at $52.00.

GRAINS

Grain futures were mixed to weaker overnight. Some risk aversion in the marketplace today is negative for the grain markets. The U.S. government closure has created a dearth of fresh fundamental news for the grain markets. The uncertainty over no fresh government is also bearish.