Opportunistic Trader Overnight Recap 1/9/2019
The upbeat interpretation of the progress in trade talks between China and the U.S. supported stocks on Wednesday with global indices rising across the board.
Asian stocks closed at a three-and-a-half-week high on hopes that easing tensions would lower the danger of a severe global economic impact.

On the economic front, all eyes will be on the Federal Reserve as traders peruse the minutes from the last policy meeting and wait for what will be the first day of a deluge of appearances from policymakers (2pm EST).

The Bank of Canada is widely expected to keep interest rates on hold and reiterate its plan to raise them gradually. The decision is due at 10:00AM ET on Wednesday with a press conference to follow an hour later.

European and Asian stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Investors are in a good mood this week as reports continue to be positive on the U.S.-China trade talks going on in Beijing. Those talks are expected to end today. “Talks with China are going very well,” President Trump tweeted Tuesday.

The marketplace is awaiting the Wednesday afternoon release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). Traders will parse the report for clues on the direction and timing of Fed policy in the coming year.

St. Louis Federal Reserve President James Bullard overnight said the Fed should refrain from raising interest rates for fear of bringing on a U.S. recession. Bullard is a voting member of the FOMC.

In other overnight news, the Euro zone reported its unemployment rate for November was 7.9% versus 8.0% in October. The November reading was the lowest in 10 years.

The U.S. government shutdown is into its third week, but the matter is currently not a front-burner issue for markets. President Trump addressed U.S. citizens in a speech on the matter Tuesday evening, and leading Democrats countered.

The key outside markets today see the U.S. dollar index slightly lower. The USDX has been trending sideways to lower on the daily chart for three weeks. Meantime, Nymex crude oil prices are higher and trading above the key $50.00 a barrel level. There are chart clues the oil market has bottomed out, including prices pushing back above the important psychological level of $50.00.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading today and hit another three-week high overnight. There are early chart clues the index has put in a bottom. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,600.00 and then at 2,625.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 2,547.50 and then at this week’s low of 2,523.25. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are higher in early U.S. trading and hit another three-week high overnight. There are early technical clues the index has bottomed out. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,609.50 and then at 6,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,546.75 and then at 6,500.00. 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, on more profit taking from recent good gains. Bulls are still in firm near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 146 even and then at Tuesday’s high of 146 14/32. Buy stops likely reside just above those levels. Shorter-term support lies at 145 even and then at 144 16/32. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are lower in early U.S. trading, on more profit taking. Bulls still have the firm chart advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 121.24.0 and then at Tuesday’s high of 122.01.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 121.16.0 and then at 121.10.0. 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 are fading as prices hit a two-month low Monday and 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 Tuesday’s high of 95.615 and then at this week’s high of 95.730. Shorter-term support is seen at this week’s low of 95.195 and then at 95.000.
NYMEX CRUDE OIL

February Nymex crude oil prices are higher and hit a three-week high of $51.09 in overnight trading. Strong longer-term technical support at the $42.00 area appears to have put in a market bottom. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-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 $52.00 and then at $52.50. Look for sell stops just below technical support at the overnight low of $49.71 and then at $49.00.
GRAINS

Grain futures were firmer 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. Rising oil prices are also bullish for grains and the rest of the raw commodity sector.