Thursday, December 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, following strong gains posted Wednesday afternoon. The marketplace deemed Federal Reserve Chairman Jerome Powell’s highly anticipated speech at the Brookings Institution Wednesday afternoon as leaning dovish on U.S. monetary policy. That rallied the U.S. stock market, pressured the U.S. dollar index and dropped U.S. Treasury yields. Gold and silver prices rallied. Powell said the U.S. central bank could slow the pace of monetary policy tightening as soon as the FOMC meeting in two weeks. However, he said the Fed will need to hold policy at restrictive levels “for some time.” Powell added that inflation remains far too high and that future rate hikes are warranted.
The Dow Jones Industrial Average has exited the bear market and has entered a new bull market, according to Dow Jones Newswires reports. The DJIA has risen 20% from its recent low. However, the S&P 500 stock index is still on track for its worst year since 2008.
Traders continue to monitor the civil unrest in China. It seems the situation is not spiraling out of control, but neither is it fading away. Reports say China is relaxing some its Covid lockdowns (likely due to the public protests), while at the same time China says new Covid infections are declining and vaccinations are on the rise.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are firmer and trading around $81.25 a barrel. There have been some reports OPEC at its meeting early next week will consider cutting its collective crude oil production. Other reports say the cartel will leave its production unchanged. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.614%.
Focus is turning to Friday morning’s U.S. employment situation report for November. The key non-farm payrolls figure is expected to come in at up 200,000, compared to the rise of 261,000 seen in the October report.
It’s another busy U.S. economic data release day Thursday, including the weekly jobless claims report, the Challenger job-cuts report, personal income and outlays, the U.S. manufacturing PMI, the ISM report on business manufacturing, construction spending, the global manufacturing PMI, monthly chain store sales, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading, on a corrective pullback after hitting a 2.5-month high overnight. Prices Wednesday closed at a technically bullish monthly high close. Bulls have the firm overall near-term technical advantage. Prices are in a six-week-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 early today. Today, shorter-term technical resistance comes in at the overnight high of 4,129.00 and then at of 4,150.00. Support for active traders is seen at 4,050.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices Wednesday closed at a 2.5-month high close and at a technically bullish monthly high close. Bulls have the 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 neutral early today. Shorter-term technical resistance is seen at the November high of 12,236.00 and then at 12,400.00. On the downside, shorter-term support is seen at 12,000.00 and then at 11,750.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly higher in early U.S. trading. Prices Monday hit a seven-week high. 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 129 even and then at 130 even. Shorter-term support lies at the overnight low of 127 25/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 6.5
March U.S. T-Notes: Prices are solidly higher and hit a nine-week high 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 early today. Shorter-term resistance lies at 114.16.0 and then at 114.24.0. Shorter-term technical support lies at this week’s low of 113.20.0 and then at 113.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading and close to Monday’s nearly five-month high. Bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar 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 bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0580 and then at 1.0600. Shorter-term support is seen at the overnight low of 1.0473 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are higher on a continued rebound after hitting an 11-month low on Monday. Bears still have the overall near-term technical advantage but a price downtrend on the daily bar chart is in jeopardy. The bears appear to be exhausted to suggest a market bottom is in place. 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 $82.50 and then at $84.00. Look for sell stops just below technical support at Wednesday’s low of $78.40 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were lower in overnight trading. Corn and soybean bulls have the overall near-term technical advantage. Wheat bears have the firm near-term technical advantage. On tap today is the weekly USDA export sales report.
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