Daily Morning Report

Wednesday, December 21–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trading volumes are likely to wane ahead of the Christmas holiday over the weekend and as a massive winter storm pounds much of the U.S. and is heading for the east coast.

The marketplace is still digesting the Bank of Japan move Tuesday to tighten its monetary policy by raising the cap for the interest rate on its 10-year bond by 0.25%. The Japanese yen surged against the U.S. dollar. Global bond and stock markets were rattled on the news because Japan is a big player in global bond markets. Japanese citizens are big savers and put much of their money into global stocks and bonds. With the higher domestic bond yield cap, Japanese citizens and companies may opt to keep more of their money at home. Speculators worldwide had for years been putting on a yen-based “carry trade” that has suddenly become very shaky. With world financial markets so highly intertwined, all of the above at least temporarily spooked the global marketplace. Some Fed watchers are saying the BOJ move underscores the notion that global inflation remains problematic and that the Fed won’t be able to do any pivot on its hawkish monetary policy in 2023.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are up and trading around $77.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.681%. 

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales, the consumer confidence index and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are firmer in early U.S. trading on short covering after hitting a five-week low Tuesday. Recent price action suggests a near-term market top is in place and the bears still have momentum. 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 to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,899.00 and then at 3,934.50. Support for active traders is seen at this week’s low of 3,803.50 and then at 3,750.00. Wyckoff’s Intra-day Market Rating: 5.5

March Nasdaq index futures: Prices are slightly up in early U.S. trading on short covering after hitting a five-week low overnight on Tuesday. Recent price action suggests a near-term market top is in place and the bears still have momentum. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 11,411.00 and then at 11,500.00. On the downside, shorter-term support is seen at this week’s low of 11,043.50 and then at the November low of 10,746.75. 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. A six-week-old uptrend on the daily bar chart has been negated. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 129 even and then at Tuesday’s high of 129 22/32. Shorter-term support lies at this week’s low of 127 19/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are slightly up in early U.S. trading. A six-week-old uptrend on the daily bar chart has been negated. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Tuesday’s high of 114.04.5 and then at this week’s high of 114.23.0. Shorter-term technical support lies at the overnight low of 113.09.5 and then at 113.00.0. 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 down 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 early today. The Euro currency finds shorter-term technical resistance at the December high of 1.0807 and then at 1.0850. Shorter-term support is seen at this week’s low of 1.0643 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

February Nymex crude oil prices are 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 $79.00 and then at $80.00. Look for sell stops just below technical support at the overnight low of $75.80 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were a bit firmer in overnight trading. Not much new this week. Corn and wheat bears have the firm 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

Tuesday, December 20–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The S&P and Nasdaq stock indexes hit new five-week lows overnight as the bulls continue to fade. Trading volumes are likely to wane as the week progresses, ahead of the Christmas holiday over the weekend.

The Bank of Japan Tuesday made a surprise move to tighten its monetary policy by raising the cap for the interest rate on its 10-year bond by 0.25%. The Japanese yen surged against the U.S. dollar in the foreign exchange market. The unexpected move by the BOJ also roiled world bond markets and even rattled stocks markets. Japanese government bonds are generally in higher demand among global investors outside the U.S.

The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil prices are up and trading around $76.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.655% and is on the rise. 

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, and new residential sales.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are near steady in early U.S. trading and hit a five-week low overnight. Recent price action suggests a near-term market top is in place and the bears have momentum. 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 to bearish early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,899.00 and then at 3,934.50. Support for active traders is seen at the overnight low of 3,803.50 and then at 3,750.00. Wyckoff’s Intra-day Market Rating: 5.0

March Nasdaq index futures: Prices are slightly weaker in early U.S. trading and hit a five-week low overnight. Recent price action suggests a near-term market top is in place and the bears have momentum. 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 bearish early today. Shorter-term technical resistance is seen at Monday’s high of 11,411.00 and then at 11,500.00. On the downside, shorter-term support is seen at 11,000.00 and then at the November low of 10,746.75. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are solidly lower in early U.S. trading. A six-week-old uptrend on the daily bar chart has been negated. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 129 22/32 and then at 130 even. Shorter-term support lies at the overnight low of 127 19/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are lower in early U.S. trading. A six-week-old uptrend on the daily bar chart has been negated. 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 114.04.5 and then at Monday’s high of 114.23.0. Shorter-term technical support lies at the overnight low of 113.11.5 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The March Euro currency futures are modestly 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 early today. The Euro currency finds shorter-term technical resistance at the December high of 1.0807 and then at 1.0850. Shorter-term support is seen at this week’s low of 1.0643 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are 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 last week’s high of $77.77 and then at $80.00. Look for sell stops just below technical support at $75.00 and then at $73.33. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were mixed to firmer in overnight trading. Not much new this week. Corn and wheat bears have the firm 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

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