Overnight Report 12/27

Opportunistic Trader Overnight Recap 12/27/2018

-S&P500 had it largest up point move in history yesterday rallying 116 points. In overnight action S&P futures are down 38 points.
-CHINA NOV. INDUSTRIAL COMPANIES’ PROFIT FALLS -1.8% Y/Y. 8th consecutive drop.


European and Asian stock markets were mixed overnight, following the big gains on Wall Street Wednesday. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins, on a corrective pullback from record-setting one-day price gains seen on Wednesday. The U.S. stock indexes posted big “key reversals” up on the daily bar charts, which is a technical clue that market bottoms have been put in place. However, strong selling pressure to end this week would negate that early, bullish chart clue that market lows are in place. Price action in the U.S. stock indexes today and Friday will now be extra important from a near-term technical perspective.

Reasons given for Wednesday’s big rally in the U.S. stock market include a sharp daily rally in the crude oil market, some upbeat reports on U.S. Christmas retail sales, notions that President Trump will not fire Federal Reserve Chairman Jerome Powell, despite his public ridicule of the Fed for raising interest rates too fast, and the stock indexes just being technically oversold and being due for a corrective bounce.

Despite the big gains in the U.S. stock market Wednesday, there is still some marketplace unease over the U.S. government’s partial shutdown that shows no signs of ending any time soon. This matter is likely to contribute to an already volatile stock market that shows no signs of calming down.

The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are weaker on a corrective pullback from solid gains scored Wednesday. February crude is trading around $45.50 a barrel after hitting a 17-month low of $42.36 a barrel on Monday.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the monthly house price index, new residential sales, and the consumer confidence index.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower in early U.S. trading today, on a corrective pullback after big gains on Wednesday that produced a bullish key reversal up that suggests a market bottom is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,481.50 and then at 2,500.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,422.50 and then at 2,400.00. 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 from Wednesday’s solid gains that produced a bullish “key reversal” up on the daily bar chart to suggest a market bottom is in place. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-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 Wednesday’s high of 6,310.00 and then at 6,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,143.50 and then at 6,100.00. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are firmer in early U.S. trading. Prices hit a contract high Wednesday and 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 the contract high of 146 3/32 and then at 146 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 144 13/32 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. Prices Wednesday hit a contract high and 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 early today. Shorter-term resistance lies at the contract high of 121.20.5 and then at 121.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 120.28.0 and then at 120.20.0. 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. Bulls still have the firm overall near-term technical advantage. 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 neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 96.650 and then at 97.000. Shorter-term support is seen at Wednesday’s low of 96.020 and then at last week’s low of 95.630.

NYMEX CRUDE OIL

February Nymex crude oil prices are lower on a corrective pullback from solid gains Wednesday. Prices Monday hit a 17-month low of $42.36. Bears are still in solid overall near-term technical control. There not yet any strong, early chart clues that a market bottom is in place, but there is strong longer-term technical support at the $42.00 area that may have stopped the bleeding. The shorter-term moving averages are still bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $47.00 and then at $48.00. Look for sell stops just below technical support at $45.00 and then at $44.00.

GRAINS

Grain futures were mostly firmer overnight, on short covering and some better risk appetite following the record-setting daily price gains in the U.S. stock indexes Wednesday. The grain market bears still have the overall near-term technical advantage.