Opportunistic Trader Overnight Recap 12/5

US Bond and Equity markets are closed for the funeral of President George HW Bush.

World stock markets were mostly lower overnight, following the big sell off in the U.S. stock indexes Tuesday. The initial trader and investor euphoria over a U.S.-China trade dispute cease-fire for 90 days has rapidly dissipated. U.S. stock indexes did post modest rebounds in overnight trading. U.S. stock and financial markets are closed today for a day of mourning former U.S. President George H.W. Bush. Other commodity futures markets will be open today.

A feature in the marketplace recently that also has the stock market bulls spooked is falling U.S. Treasury yields (rising prices). The five-year T-Note yield is presently below the lower maturities. A fully inverted yield curve has been historically bearish for the U.S. economy and stock market. Right now the 10-year Treasury note yield remains above the 2-year, so the yield curve is not fully inverted.

The key outside markets today find the U.S. dollar index lower. Meantime, Nymex crude oil prices are near steady and trading around $53.00 a barrel. The OPEC oil cartel will meet in Vienna, Austria on Thursday. Reports earlier this week said Russian and Saudi Arabian officials plan to extend production cuts. However, reports today said Saudi Arabia may not have agreed to a cut yet.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the Federal Reserve’s beige book.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are firmer in early U.S. trading today, on a mild corrective bounce from strong selling pressure Tuesday that put the bears back in technical control. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,750.00 and then at 2,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,700.00 and then at 2,675.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are higher in early U.S. trading, on a short covering bounce from strong downside pressure on Tuesday. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,900.00 and then at 6,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,814.75 and then at 6,750.00. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Markets were closed overnight. 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 to bullish early today. Shorter-term technical resistance is seen at Tuesday’s high of 143 even and then at 143 16/32 even. Buy stops likely reside just above those levels. Shorter-term support lies at 142 even and then at 141 16/32. Sell stops likely reside just below those levels.
March U.S. T-Notes: The market was closed overnight. 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 to bullish early today. Shorter-term resistance lies at Tuesday’s high of 120.09.0 and then at 120.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.25.0 and then at 119.20.0. Sell stops likely reside just below those levels.

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.575 and then at 96.685. Shorter-term support is seen at 96.000 and then at this week’s low of 95.750.

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly lower in early U.S. trading today. Bears are in firm overall near-term technical control. There are still no early clues that a market bottom is close at hand. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $54.55 and then at $55.00. Look for sell stops just below technical support at $52.50 and then at $52.00.
GRAINS

Grain futures prices are set to open steady to slightly lower today. The bullishness from the U.S.-China trade ceasefire has quickly faded in the grain markets. The question this week will be if the short-covering rebounds seen Monday and Tuesday can be sustained, or will the rallies fizzle. The grain market bears still have the overall near-term technical advantage.