Opportunistic Trader Overnight Recap 1/3/2019

Key Headlines:
– Technology company’s all over the world are trading lower behind news after the bell yesterday: AAPL warns it will miss earnings slashing guidance. AAPL ”While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote in the letter. He pointed in part to “rising trade tensions” with the U.S. and China.
-FLASH CRASH in G-10 FX Markets. Following the risk off AAPL news USD/JPY and AUD/JPY traded significantly lower USD/JPY from 108.5 to 103, AUD/JPY 76 to 61. Both have recovered most of the losses but banks are maintaining many of these prints. Liquidity and algo’s being blamed at the moment.
-US Will see ADP Employment data at 8:15 AM EST

European and Asian stock markets were mostly down overnight. U.S. stock indexes are again pointed toward solidly lower openings when the New York day session begins. A surprising warning from Apple about slowing sales, especially in China, helped to sink global stock indexes. The Apple news only added to worries about the major economies of the world seeing significantly slower growth rates in 2019.

Currency markets in Asia were roiled overnight, led by a big jump in the Japanese yen against the U.S. dollar. The British pound and the Canadian dollar slumped against the greenback. Other currencies also experienced higher volatility. Some market watchers blamed the downbeat Apple news, released after the U.S. stock market closed on Wednesday. Others blamed thin, post-holiday trading conditions for the currency gyrations, including Japan’s markets being closed for a holiday.

There are also lingering concerns about the U.S. government shutdown that is well into its second week.

A feature in the marketplace the first couple days of the new trading year is falling U.S. Treasury yields (rising prices). U.S. T-Bond and T-Note futures prices hit new contract highs overnight. In a surprising change of sentiment, the Fed funds futures market now shows a 90% chance the Federal Reserve will stand pat on interest rates in 2019, or even make a cut. Just a couple months ago the Fed funds futures were suggesting the marketplace reckoned by 90% odds that the Fed would raise interest rates in 2019.

The key outside markets today see the U.S. dollar index weaker on a corrective pullback from Wednesday’s solid gains. Meantime, Nymex crude oil prices are slightly lower and trading just above $46.00 a barrel, on a downside correction from good gains Wednesday.

It’s a very busy day for U.S. economic data Thursday, including the weekly MBA mortgage applications survey, the Challenger job-cuts report, the ADP national employment report, the weekly jobless claims report, the ISM New York report on business, the ISM manufacturing report on business, and domestic auto industry sales.

Traders are awaiting what is arguably the most important U.S. data point of the month: Friday morning’s employment situation report for December from the Labor Department. The key non-farm payrolls number is seen coming in at a up 176,000.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower in early U.S. trading today. Bears still have the overall near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at the overnight high of 2,485.25 and then at 2,500.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,452.25 and then at 2,425.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are solidly lower in early U.S. trading. Bears have the overall near-term technical advantage. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,254.00 and then at 6,300.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,154.00 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 higher and hit another contract high in early U.S. trading. 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 147 29/32 and then at 148 even. Buy stops likely reside just above those levels. Shorter-term support lies at 147 even and then at 146 even. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are higher in early U.S. trading and hit another contract high overnight. 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 the contract high of 122.23.0 and then at 122.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 122.08.0 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 slightly lower in early U.S. trading. The bulls still have the 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 early today. The dollar index finds shorter-term technical resistance at this week’s high of 96.560 and then at 97.000. Shorter-term support is seen at the overnight low of 96.035 and then at 95.630.

NYMEX CRUDE OIL

February Nymex crude oil prices are slightly weaker in early U.S. trading. Bears are still in firm overall near-term technical control. However, there is strong longer-term technical support at the $42.00 area that may have stopped the bleeding. 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $47.78 and then at $49.00. Look for sell stops just below technical support at $46.00 and then at $45.00.

GRAINS

Grain futures were mixed overnight. The grain market bears still have the overall near-term technical advantage. However, the recent upbeat news reports on U.S.-China trade relations are limiting selling pressure, as are ideas the raw commodity sector may be poised for an upturn in 2019.