Daily Morning Report

Monday, December 19–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. It’s a quieter start to the trading week—the week before the Christmas holiday. Reports say the relaxed Covid restrictions in China have caused a surge in infections in the world’s most populous country. Traders will continue to closely monitor this situation. Some China watchers are saying the Covid infections and deaths situation in China could become very bad in the coming few months.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are slightly up and trading around $74.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.522%. 

U.S. economic data due for release Monday is light and includes the NAHB housing market index.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are a bit firmer in early U.S. trading, on short covering after hitting a five-week low last Friday and closing at a technically bearish weekly low close. Recent price action suggests a near-term market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Friday’s high of 3,934.50 and then at 4,000.00. Support for active traders is seen at last week’s low of 3,855.25 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 5.5

March Nasdaq index futures: Prices are firmer in early U.S. trading on short covering after hitting a five-week low last Friday and closing at a technically bearish weekly low close. Recent price action suggests a near-term market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 11,500.00 and then at 11,700.00. On the downside, shorter-term support is seen at last week’s low of 11,275.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are lower in early U.S. trading. Prices are still in a six-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above 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 the overnight high of 131 1/32 and then at 132 even. Shorter-term support lies at 130 even and then at 129 11/32. Wyckoff’s Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a six-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above 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 Friday’s high of 114.30.5 and then at the December high of 115.11.5. Shorter-term technical support lies at Friday’s low of 114.06.0 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The March Euro currency futures are slightly up in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily chart. 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 to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0726 and then at the December high of 1.0807. Shorter-term support is seen at the overnight low of 1.0649 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly up in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-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 Friday’s high of $76.57 and then at $78.00. Look for sell stops just below technical support at $73.00 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were mixed to lower in overnight trading. Not much new, overall. On tap today is the weekly USDA export inspections report. Corn and wheat bears have the overall near-term technical advantage as downtrends are in place on the daily bar charts. Soybeans bulls have the chart edge, led by the recent surge in soybean meal futures, and both markets are in uptrends on the daily bar charts. 

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

Thursday, December 15–Jim Wyckoff’s Morning Markets Report

Global stock markets were lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. A hawkish Federal Reserve has traders and investors in a “risk-off” stance Thursday. Said market analyst Craig Erlam of OANDA: “Safe to say, investors simply didn’t see that (the still-hawkish Fed rhetoric) coming. Two months of better-than-expected U.S. inflation data were enough to convince investors that the Fed would not only ease off the brake but signal it would do so more in the coming months. Whether through complacency or a desperate desire to see value in equity markets, investors overlooked the concerns that have plagued the U.S. central bank for months: The fear of entrenched inflation has been a much greater concern” for the Fed. “Higher for longer” is the marketplace takeaway from this week’s FOMC meeting—meaning higher interest rates for a longer period of time—to ensure the Fed tamps down hard on inflation.

Traders are awaiting the results of the European Central Bank and the Bank of England monetary policy meetings on Thursday. The BOE just raised its main interest rate by 0.5%. The ECB will also likely to follow the U.S. Federal Reserve and the BOE with a half-point rate hike. The central banks of Switzerland and Norway raised their interest rates Thursday but in smaller increments of policy tightening.

China and its fight against Covid remains near the front burner of the marketplace. Broker SP Angel this morning said in an email dispatch there is increasing evidence that China is now “allowing Covid to rip through the population.” There is relatively little vaccination and almost no effective vaccination against Omicron in China. “That means the virus will bypass most of the Covid controls left in place.” The Wall Street Journal said today that “China’s economy took a big hit in November” due to strict Covid lockdown policies.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady trading around $77.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.484%. 

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Empire State manufacturing survey, the Philadelphia Fed business survey, retail sales, industrial production and capacity utilization, manufacturing and trade inventories, Treasury international capital data and the ISM semi-annual report on business and the economy.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off to close nearer the daily low suggests a near-term market top is in place. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,043.00 and then at Wednesday’s high of 3,997.00. Support for active traders is seen at the December low of 3,945.75 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 4.0

March Nasdaq index futures: Prices are lower in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off to close nearer the daily low suggests a near-term market top is in place. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,898.00 and then at 12,000.00. On the downside, shorter-term support is seen at the December low of 11,535.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are a firmer in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 132 13/32 and then at 133 even. Shorter-term support lies at 131 even and then at 130 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 115.11.5 and then at 115.24.0. Shorter-term technical support lies at the overnight low of 114.19.5 and then at 114.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The March Euro currency futures are lower in early U.S. trading. Prices hit a 5.5-month high Wednesday. Bulls have the firm overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily chart. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0768 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at this week’s low of 1.0578. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

January Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below 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 $79.00 and then at $80.00. Look for sell stops just below technical support at $76.00 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

U.S. grain futures were narrowly mixed in overnight trading. On tap today is the weekly USDA export sales report. Corn and wheat bears have the overall near-term technical advantage amid downtrends in place on the daily bar charts. Soybeans bulls have the chart edge, led by the recent surge in soybean meal futures, and both markets are in uptrends on the daily bar charts. 

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

Wednesday, December 14–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight, with European shares mostly lower and Asian shares mostly higher. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Most stock and financial markets are pausing as major central bank meetings are taking place this week. The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends Wednesday afternoon with a statement, fresh economic projections and a press conference from Fed Chair Jerome Powell. The FOMC is likely to raise U.S. interest rates by 0.5%. The European Central Bank and the Bank of England meet on Thursday and are likely to follow the U.S. Federal Reserve with half-point rate hikes.

The key outside markets today see the U.S. dollar index weaker. Prices Tuesday hit a 5.5-month low following a slightly cooler than expected U.S. consumer price index report. Nymex crude oil prices are firmer and trading around $76.00 a barrel. A major oil pipeline in the U.S. has been shut due to a leak, and that’s supporting Nymex crude oil prices this week. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.5%. 

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

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off to close nearer the daily low suggests the bulls are very tired now. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at 4,142.50. Support for active traders is seen at 4,000.00 and then at the December low of 3,945.75. Wyckoff’s Intra-day Market Rating: 4.5

March Nasdaq index futures: Prices are slightly lower in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off to close nearer the daily low suggests the bulls are very tired now. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 12,257.75 and then at Tuesday’s high of 12.339.00. On the downside, shorter-term support is seen at 11,725.00 and then at the December low of 11,535.50. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are a weaker in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. 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 technical resistance is seen at Tuesday’s high of 132 13/32 and then at 133 even. Shorter-term support lies at 130 8/32 even and then at this week’s low of 129 11/32. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are slightly higher in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. 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 neutral early today. Shorter-term resistance lies at this week’s high of 115.11.5 and then at 115.24.0. Shorter-term technical support lies at 114.16.0 and then at 114.00.0. 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 firmer in early U.S. trading. Prices hit a 5.5-month high Tuesday. Bulls have the firm overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily chart. 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 bullish early today. The Euro currency finds shorter-term technical resistance at Tuesday’s high of 1.0748 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at this week’s low of 1.0578. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $78.00 and then at $80.00. Look for sell stops just below technical support at $75.00 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were lower in overnight trading. Not much new in the grains at mid-week. Corn and wheat bears have the overall near-term technical advantage amid downtrends in place on the daily bar charts. Soybeans bulls have the chart edge, led by a surge in soybean meal futures, and both markets are in uptrends on the daily bar charts. 

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