Overnight Report 1/25


European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. There are several new elements in the marketplace today that could provide some more volatility during U.S. trading hours.

The marketplace is so far taking in stride the news just out that another close friend and aide of President Donald Trump was arrested in Florida, in connection with the Russian election tampering investigation.

In other overnight news, a Dow Jones Newswires report said the Federal Reserve will likely end its unwinding of its massive U.S. securities portfolio sooner than expected. That, in effect, is another sign the Fed is backing off on tightening its monetary policy and further suggests the Fed will not raise U.S. interest rates this year.

There was more downbeat economic news coming out of the European Union today. The European Central Bank’s “Survey of Professional Forecasters” saw them lower Euro zone economic growth to 1.5% this year and in 2020. The last forecast from the group saw growth in 2019 at 1.8% and in 2020 at 1.6%. Meantime, the German Ifo business sentiment index dropped to a three-year low in January. This news comes as the Euro currency slumped to 1.5-year low against the U.S. dollar on Thursday.

The outside markets today see the U.S. dollar index trading lower on a corrective pullback from good gains Thursday that pushed prices to a three-week high. Meantime, Nymex crude oil prices are slightly higher and trading just above $53.00 a barrel.

There were several key U.S. economic reports due for release Friday, but the ongoing government shutdown has cancelled them. Traders continue to deal with a lack of fresh U.S. economic data to help them drive the markets.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Prices are still in an uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are still 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 neutral 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 this week’s low of 2,612.50 and then at 2,600.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are firmer in early U.S. trading. Prices are 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 neutral early today. Shorter-term technical resistance is seen at the January high of 6,828.75 and then at 6,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,676.75 and then at this week’s low of 6,592.25. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are weaker in early U.S. trading today. Trading has been choppy recently. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 145 30/32 and then at 146 11/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 144 31/32 and then at the January low of 144 9/32. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls still have the overall chart advantage. 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 this week’s high of 121.27.0 and then at 122.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 121.13.0 and then at Wednesday’s low of 121.07.0. 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, on a corrective pullback from good gains Thursday. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.235 and then at 96.500. Shorter-term support is seen at this week’s low of 95.705 and then at 95.480.

NYMEX CRUDE OIL

March Nymex crude oil prices are slightly higher in early U.S. trading. Prices are still in an uptrend on the daily bar chart, but just barely now. The shorter-term moving averages are still 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 this week’s high of $54.51 and then at $55.00. Look for sell stops just below technical support at this week’s low of $51.86 and then at $51.00.

GRAINS

Grain futures were narrowly mixed overnight. Choppy and sideways trading persists in 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 bearish and is prompting the sideways grind in prices.