Thursday, January 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. There was some upbeat economic data from China released Thursday, to help boost world equity markets. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. indexes hit new record highs overnight.
Wednesday afternoon’s release of the minutes of the last Federal Open Market Committee (FOMC) meeting held on Dec. 12-13 saw the marketplace deem the minutes as favoring the hawkish camp on U.S. monetary policy. The FOMC members are still seeking a gradual rise in U.S. interest rates, with some members saying the new U.S. tax policy could raise GDP.
Tensions in Iran are still not far from the front burner of the market place. This matter is supporting some safe-haven gold and silver markets, as well as boosting the crude oil market.
The key outside markets on Thursday morning find the U.S. dollar index lower. Meantime, Nymex crude oil prices are slightly higher and hit a three-year high above $62.00 a barrel overnight.
Traders and investors are looking ahead to Friday’s U.S. employment report from the Labor Department. This report is arguably the most important U.S. data point of the month. The key December non-farm payrolls number is forecast to come in at up 180,000.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ADP national employment report, the U.S. services PMI, the global services PMI, monthly U.S. chain store sales data, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are firmer and poked to another contract and record high overnight. Bulls have the solid overall near-term technical advantage. There are no strong, early chart clues to suggest a market top is close at hand. 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 2,725.00 and then at 2,735.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2,692.25 and then at this week’s low of 2,674.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are firmer in early U.S. trading and hit another record high. The 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 contract and record high of 6,602.00 and then at 6,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,580.00 and then at 6,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field, amid recent choppy trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 152 7/32 and then at Wednesday’s high of 152 13/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 151 21/32 and then at this week’s low of 151 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 123.25.0 and then at this week’s high of 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 123.17.0 and then at the December low of 123.12.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is weaker in early U.S. trading. Bears have the firm near-term technical advantage. The shorter-term moving averages for the dollar index are bearish 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 for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 92.000 and then at 92.375. Shorter-term support is seen at this week’s low of 91.470 and then at 91.250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly firmer in early U.S. trading and hit a three-year high overnight. Bulls have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $62.21 and then at 63.00. Look for sell stops just below technical support at $61.00 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were weaker overnight. Not much new. Grain market bears remain in overall near-term technical control. However, the corn and wheat markets are showing early signs that market bottoms are in place.