Friday, December 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer in overnight trading. The U.S. stock indexes are pointed to weaker openings when the New York day session begins. It’s been a choppy trading week for the U.S. stock indexes, but they are now in near-term price downtrends, to suggest market tops are in place. There remains marketplace uncertainty regarding the new Omicron strain of the coronavirus. The variant has prompted many countries to impose travel restrictions. Look for continued wobbly trading in the stock market until much more is known about Omicron.
Traders and investors are awaiting the Friday morning U.S. employment situation report for November from the Labor Department—arguably the most important U.S. data point of the month. The key non-farm payrolls figure is expected to come in at up 573,000 compared to a rise of 531,000 in October.
The key “outside markets” today see Nymex crude oil prices higher and trading around $68.00 a barrel, after hitting a three-month low of $64.43 on Tuesday. The OPEC cartel agreed Thursday to pump more oil starting in January, but left the door open to change its mind if the global economic conditions change. The U.S. dollar index is slightly higher. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.427%.
Other U.S. economic data due for release Friday includes the U.S. services PMI, the ISM report on business services, the global services PMI, and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls have faded badly recently to suggest a near-term market top is in place. Prices are now trending lower on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at 4,600.00 and then at 4,650.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,543.75 and then at this week’s low of 4,497.75. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are slightly higher in lower U.S. trading. Prices Thursday hit a six-week low to suggest a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Thursday’s high of 16,066.25 and then at 16,150.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 15,762.75 and then at 15,600.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are up in early U.S. trading. Bulls have momentum. 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 to bullish early today. Shorter-term technical resistance is seen at this week’s high of 163 4/32 and then at 163 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 6/32 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 and 18-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 131.00.0 and then at this week’s high of 131.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.17.0 and then at 130.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are slightly up in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1417 and then at 1.1450. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1271 and then at the November low of 1.1221. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bears have the near-term technical advantage as prices are trending lower. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $68.71 and then at $70.00. Look for sell stops just below technical support at the overnight low of $66.44 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were mixed in overnight trading. There is less risk aversion in the marketplace late this week and that has given the grain market bulls some strength. However, as long as some Omicron uncertainty exists in the general marketplace, gains in the grains will likely be constrained. Grain traders will continue to look to the key outside markets for direction—crude oil and the U.S. stock indexes.
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