Friday, December 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower in overnight
trading. U.S. stock indexes are pointed toward weaker
openings when the New York day session begins. Today is the
quarterly triple- witching phenomenon–the simultaneous
expiration of stock options, index options and index
futures. These days can cause higher volatility. The stock
market bulls late this week have quickly pulled in their
horns. It seems traders and investors have pivoted after
the U.S. stock indexes posted strong gains in the immediate
aftermath of the FOMC meeting Wednesday afternoon.
Thursday’s and Friday’s price action in the stock markets
suggest traders and investors have realized they are now
staring down the double-barrel shotgun of rising interest
rates/inflation and a resurging coronavirus that threatens
to again crimp global economic growth. It could be that
other major central banks moving to tighten their monetary
policies or signaling their intent to do so, shortly after
the Wednesday FOMC meeting pushed traders and investors
into risk-averse postures.
Gold prices surged to a nearly three-week high Friday,
above $1,800.00, on safe-haven demand and as traders seek
out the metals as an inflation hedge.
In overnight news, the Euro zone reported its November
consumer price index up 0.4% from October and up 4.9%,
year-on-year.
The key “outside markets” today see Nymex crude oil prices
lower and trading around $71.00 a barrel. The U.S. dollar
index is slightly higher today. Meantime, the yield on the
U.S. Treasury 10-year note is presently fetching 1.429%.
There is no major U.S. economic data due for release today.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early
U.S. trading. The 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 is above 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 4,668.00 and
then at 4,700.00. Buy stops likely reside just above those
levels. Downside support for active traders is seen at the
overnight low of 4,634.50 and then at this week’s low of
4,596.25. Sell stops likely reside below those levels.
Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are solidly lower and
hit a two-week low 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. The 9-day
average is above the 18-day. Short-term oscillators (RSI,
slow stochastics) are bearish early today. Shorter-term
technical resistance is seen at the overnight high of
15,897.50 and then at 16,000.00. Buy stops likely reside
just above those levels. On the downside, shorter-term
support is seen at the overnight low of 15,676.75 and then
at the December low of 15,547.25. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S.
trading. 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
this week’s high of 162 23/32 and then at 163 even. Buy
stops likely reside just above those levels. Shorter-term
support lies at the overnight low of 161 29/32 and then at
161 16/32. Sell stops likely reside just below those
levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S.
trading. 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 resistance is seen at the
December high of 131.16.0 and then at 131.20.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 130.30.5 and
then at 130.26.0. Sell stops likely reside just below those
levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are weaker in early U.S.
trading. Bears still have the solid overall near-term
technical advantage. However, prices have been trading
sideways at lower levels for three week. The shorter-term
moving averages for the Euro are neutral early today, as
the 4-day is even with 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 this week’s high of 1.1388 and
then at 1.1417. Buy stops likely reside just above those
levels. Shorter-term support is seen at 1.1300 and then at
this week’s low of 1.1247. Sell stops likely reside just
below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
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 to beaerish early today. Look for
buy stops to reside just above technical resistance at the
overnight high of $72.26 and then at last week’s high of
$73.34. 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 steady to firmer in overnight
trading. Risk aversion in the marketplace Friday will
squelch the grain market bulls. The corn and wheat market
bulls have the overall near-term technical advantage, while
the soybean bears have the edge.
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%):
- 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