Monday, December 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings and new record highs for the S&P 500 and Nasdaq indexes when the New York day session begins. The marketplace has been buoyed by President Trump in a surprise move over the weekend signing the Covid-19 aid bill that the U.S. Congress agreed upon just before Christmas. The bill provides direct payments to Americans and also loans to U.S. businesses.
Traders and investors are also more upbeat as Covid vaccines continued to be rolled out in the U.S. and Europe. Still the enthusiasm is tempered by the pandemic that continues to be out of control in the U.S., Europe and other parts of the world. Some health experts are saying January will be the worst month yet, as far as the human toll. Restrictions on many businesses in many locations remain in place and may get tighter in January.
The U.S. dollar index is slightly lower in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices firmer and trading around $48.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.956%.
U.S. economic data due for release Monday is light and includes the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher and hit a record high in early U.S. trading. A near-term price uptrend has been restarted on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 3,726.50 and then at 3,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,700.00 and then at the overnight low of 3,676.00. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher and hit a record high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 the overnight record high of 12,798.75 and then at 12,900.00. On the downside, shorter-term support is seen at the overnight low of 12,655.25 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 173 even and then at 173 14/32. Shorter-term support lies at 172 even and then at last week’s low of 171 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 137.30.5 and then at 138.03.0. Shorter-term technical support lies at last week’s low of 137.20.0 and then at 137.15.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are firmer early today. Bulls are in solid technical control. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below 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 1.2278 and then at the December high of 1.2303. Shorter-term support is seen at 1.2185 and then at last week’s low of 1.2158. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $48.86 and then at the December high of $49.43. Look for sell stops just below technical support at $48.00 and then at the overnight low of $47.50. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed to higher in early U.S. pre-market trading. The grain markets bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily charts. The supply and demand fundamentals in the grains continue to favor the bulls. Dry weather in South American growing regions is also bullish for corn and soybeans. The grain markets are getting over-extended on a short-term technical basis and are soon due for normal corrective pullbacks in their uptrends. On tap Monday is the weekly USDA export inspections report.
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