Thursday, January 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Risk appetite is not keen this week due to worries about a global economic slowdown in 2023. In the coming weeks, keep a closer eye on the crude oil market, as its price trajectory will give the marketplace a very good reading on the global economic growth prospects in 2023. Nymex crude oil prices are higher early today and trading around $74.50 a barrel. However, oil’s price drop the first two trading days of the new year was the steepest, percentage-wise, in over 30 years–suggesting dour prospects for any robust world economic growth this year.
In overnight news, the Euro zone producer price index for November came in at up 27.1%, year-on-year, mostly due to rising energy costs. However, excluding energy, the PPI was still up 13.1% on the year.
The other key outside market today sees the U.S. dollar index slightly lower. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.699%.
Traders and investors are starting to focus on Friday’s U.S. December employment situation report from the Labor Department. The key non-farm payrolls number is expected to come in at up 200,000, following a rise of 263,000 in the November report.
It’s a busy day for U.S. economic data releases Thursday, including the weekly jobless claims report, the Challenger job-cuts report, the ADP national employment report, the U.S. services purchasing managers index (PMI), the weekly DOE liquid energy stocks report, the global services PMI and the monthly retail chain store sales index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. 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 bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,906.75 and then at 3,919.75. Support for active traders is seen at this week’s low of 3,814.50 and then at the December low of 3,788.50. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 11,182.00 and then at 11,411.00. On the downside, shorter-term support is seen at this week’s low of 10,844.75 and then at the December low of 10,758.75. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 128 4/32 and then at 129 even. Shorter-term support lies at Wednesday’s low of 126 17/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 113.15.5 and then at 113.24.0. Shorter-term technical support lies at Wednesday’s low of 112.26.5 and then at 112.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. However, a three-month-old uptrend on the daily chart has been negated. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0736 and then at last week’s high of 1.0767. Shorter-term support is seen at this week’s low of 1.0570 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are higher on a corrective bounce from this week’s strong losses. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $75.00 and then at $77.00. Look for sell stops just below technical support at this week’s low of $72.73 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Prices were mixed to firmer overnight on upside corrections after strong losses posted Wednesday. Bulls have faded this week to begin to suggest near-term market tops are in place in the grains. Risk aversion in the marketplace at present has the grain market bulls still timid.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff