U.S. Indices Open Session In The Red

It has been a rough open on Wall Street, featuring all three major U.S. indices trading in the red. For the first hour, losses in the DJIA(-80), S&P 500(-12) SPX, and NASDAQ(-38) have been the story. Following the dovish tone of Wednesday’s FOMC Minutes, many investors were expecting strength early on in today’s session. This has not been the case.

One thing to watch as the day wears on is the relative volatility of the markets themselves. In comparison to the action of late 2018, the opening drop in U.S. stocks is not necessarily a paradigm-shifting event. It is very possible that the U.S. indices reverse course and erase the early losses by the closing bell.

During the U.S. pre-market hours, two jobs reports hit the wires. First, Continuing Jobless Claims (Dec. 28) came in at 1.722M, above projections. Initial Jobless Claims (Jan. 4) fell to 216K, lagging estimates of 225K. In total, the reports were mixed and indicate that there has been no real change to the U.S job market to kickoff 2019.

March E-mini DOW Futures

The outlook for the March E-mini DOW is fairly straightforward: this market is in a non-committal position, exhibiting tight daily ranges.

Here are the support and resistance levels to watch as the session unfolds:

• Resistance(1): 78% Current Wave Retracement, 24110
• Support(1): Bollinger MP, 23657
• Support(2): Daily SMA, 23494

Overview: In a live market update from yesterday, I outlined a short trading plan for the March E-mini DOW. This recommendation remains valid as the DJIA turned in a surprisingly tight FOMC Minutes session.

It is going to be an interesting late-week period for the U.S. stock markets. The government shutdown and a suddenly dovish FED will give traders an abundance of food for thought going into the weekend break. Whether we see a major sell-off or continuation of the recent bullish trend remains to be seen, but heavy action is certainly possible.