Monday, December 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
Major central banks will this week complete the most aggressive year for interest-rate hikes in four decades with their fight against inflation still not over even as their economies slow. The Federal Reserve’s Open Market Committee (FOMC) meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. The FOMC is mostly likely to raise U.S. interest rates by 0.5%. Then, 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.
Another major U.S. data point this week will be the consumer price index report for November, out on Tuesday morning. CPI is seen coming in up 7.3%, year-on-year.
A couple of interesting news headlines were on the wires this morning. One from the Wall Street Journal reads, “Markets show more confidence in soft landing.” And a Barron’s headline says, “Bitcoin is in for a big week; traders now see $8,500 as more likely than $34,000.”
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are modestly lower trading around $70.50 a barrel. Prices last Friday hit an 11-month low. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.523%.
U.S. economic data due for release Monday is light and includes the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are a bit higher in early U.S. trading. A price uptrend on the daily bar chart has stalled out. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Friday’s high of 4,024.00 and then at 4,050.00. 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: 5.5
March Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last Friday’s high of 11,861.25 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: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. Prices are still in a four-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 to bullish early today. Shorter-term technical resistance is seen at the December high of 132 even and then at 133 even. Shorter-term support lies at Friday’s low of 129 15/32 and then at 129 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a four-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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Friday’s high of 114.24.5 and then at the December high of 115.06.5. Shorter-term technical support lies at the overnight low of 113.29.0 and then at 113.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bulls have the 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 the December high of 1.0674 and then at 1.0700. Shorter-term support is seen at the overnight low of 1.0578 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are weaker in early U.S. trading and near Friday’s 11-month low. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.32 and then at $74.00. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were 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. Soybeans bulls have the chart edge, led by a surge in soybean meal futures.
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