Tuesday, January 23–Jim Wyckoff’s morning markets report
In overnight news, reports said China’s government is considering a $280 billion cash infusion to stabilize its eroding stock market. China held its 1-year and 5-year loan prime rates steady on Monday and then followed with the news today to bolster its stock market. The Shanghai Composite Index hit a 5-year low this month. The news of a potential government cash infusion lifted the Shanghai index by 0.5% while the Shenzhen Component Index rose around 1.5%.
In other news, the Bank of Japan kept its monetary policy steady at its meeting Tuesday. The BOJ kept its deposit rate at minus 0.1% and kept its 10-year bond yield target at around zero percent.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $74.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.128%.
U.S. economic data due out Tuesday includes the weekly Johnson Redbook retail sales report and the Richmond Fed business survey.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading after hitting a contract and record high Monday. Bulls have the solid overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The 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 is above 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 Monday’s high of 4,898.25 and then at 4,925.00. Support for active traders is seen at 4,841.50 and then at last Friday’s low of 4,808.50. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are near steady after hitting a contract and record high Monday. 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 with the 9-day and 18-day. The 9-day is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 17,585.00 and then at 17,700.00. On the downside, shorter-term support is seen at 17,400.00 and then at 17,300.00. 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. 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 neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 121 5/32 and then at 122 even. Shorter-term support lies at last week’s low of 119 10/32 and then at 119 even. 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 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 resistance lies at Monday’s high of 111.19.5 and then at 112.00.0. Shorter-term technical support is seen at Monday’s low of 111.04.5 and then at last week’s low of 110.26.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are down in early U.S. trading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0940 and then at 1.1000. Shorter-term support is seen at the January low of 1.0871 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Monday’s high of $75.46 and then at $76.31. Look for sell stops just below technical support at Monday’s low of $72.56 and then at last week’s low of $70.62. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were slightly up overnight. Not much new lately. Charts are fully bearish for corn and wheat. Technicals are also bearish for soybeans, meal and soybean oil. All the grain markets are trending down on the daily bar charts. That means the path of least resistance for their prices remains sideways to lower.
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