Overnight Recap 1/7/2019

This Week we get FOMC minutes on Wednesday, US CPI report Friday, and a number of FOMC speakers including Powell.

European stock markets were mostly weaker overnight, but Asian shares were mostly up. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, on mild corrective pullbacks from strong gains posted Friday.

Trader and investor attitudes are generally upbeat to start the trading week, following the big gains on Wall Street Friday that followed a strong U.S. jobs report released Friday morning. Federal Reserve Chairman Jerome Powell also made comments on Friday that U.S. inflation levels are not problematic and that the Fed will be flexible in its monetary policy, which also assuaged the marketplace. The U.S. and China are holding face-to-face trade talks starting today, amid optimism the world’s two largest economies will make progress on their major trade dispute.

The U.S. government shutdown is into its third week now, but the matter is garnering less attention from the marketplace and is not a front-burner issue.

The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are higher and trading just above $49.00 a barrel. There are early chart clues the oil market has bottomed out, but the bulls still have heavy lifting to do to suggest a price uptrend can be sustained.

U.S. economic data due for release Monday includes manufacturers’ shipments and inventories, the employment trends index, and the ISM non-manufacturing report on business.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are weaker in early U.S. trading today after hitting a two-week high overnight and following the big gains Friday that produced a bullish weekly high close. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,551.75 and then at 2,575.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,500.00 and then at 2,475.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are weaker in early U.S. trading after hitting a two-week high overnight and after producing a bullish weekly high close on Friday. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,495.50 and then at 6,550.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,350.00 and then at 6,300.00. 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. Prices last Friday hit a contract high. Bulls are in solid near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 148 even and then at the contract high of 148 27/32. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 146 19/32 and then at 146 even. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are slightly higher in early U.S. trading. Prices hit a contract high last Thursday. Bulls have the solid chart advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 122.16.0 and then at 122.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.03.5 and then at 122.00.0. Sell stops likely reside just below those levels.

U.S. DOLLAR INDEX

The March U.S. dollar index is lower in early U.S. trading. The bulls are fading a bit as prices have been trending lower on the daily chart for three weeks. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.730 and then at 96.000. Shorter-term support is seen at last week’s low of 95.375 and then at 95.000.

NYMEX CRUDE OIL

February Nymex crude oil prices are higher and hit a nearly three-week high in early U.S. trading. Strong longer-term technical support at the $42.00 area appears to have stopped the bleeding to suggest a market bottom is in place. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $50.00 and then at $51.00. Look for sell stops just below technical support at the overnight low of $48.11 and then at $47.50.

GRAINS

Grain futures were mixed overnight. There are increasing hopes the U.S. and China will reach a trade deal in the coming weeks, which is supporting gains in the grains. The strong jobs report on Friday is also encouraging to the grain market bulls.