Wednesday, January 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward steady to slightly higher openings when the New York day session begins. Corporate earnings reports are in focus this week.
In overnight news, the Japanese yen tumbled against the U.S. dollar as the Bank of Japan made a surprise move to keep its cap in the 10-year government bond yield at 0.5%. Many thought the BOJ would be hawkish and raise the cap. The BOJ move is an attempt to keep Japanese interest rates low, while global interest rates have been rising.
The Euro zone consumer price index for December came in at up 9.2%, year-on-year, which was in line with market expectations.
The International Energy Agency said today that world oil demand will hit a record high this year as China’s economy is expected to see a jump in oil usage.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are higher and trading around $81.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.476%.
It’s a very busy day for U.S. economic data released Wednesday, including the weekly MBA mortgage applications survey, retail sales, the producer price index, the Johnson Redbook and chain store sales indexes, industrial production and capacity utilization, the NAHB housing market index, manufacturing and trade inventories and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. 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 neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,035.25 and then at 4,075.00. Support for active traders is seen at last Friday’s low of 3,961.75 and then at 3,925.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are a bit firmer in early U.S. trading and hit a four-week high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 11,800.00 and then at 12,000.00. On the downside, shorter-term support is seen at this week’s low of 11,510.25 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly higher in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at the January high of 131 10/32 and then at 132 even. Shorter-term support lies at 130 even and then at the overnight low of 129 14/32. Wyckoff’s Intra-Day Market Rating: 6.5
March U.S. T-Notes: Prices are solidly higher in early U.S. trading. 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 the January high of 115.15.5 and then at 115.24.0. Shorter-term technical support lies at the overnight low of 114.16.0 and then at this week’s low of 114.09.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Prices hit an eight-month high Tuesday. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0916 and then at 1.0950. Shorter-term support is seen at 1.0800 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are higher and hit a six-week high in early U.S. trading. 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 $83.00 and then at $84.00 Look for sell stops just below technical support at the overnight low of $80.55 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Prices were firmer overnight. Corn and soybean market bulls have the near-term technical advantage. Wheat futures bears have the advantage. The grain market bulls have gained some fresh momentum this week, possibly as the big funds are looking to get long on ideas of better global economic growth this year fueling better demand for the grains.
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