Wednesday, December 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. The marketplace is not paying much attention to President Trump’s threat to not sign a U.S. stimulus package agreed upon by the Congress a few days ago. Trump wants more funding for individual Americans—triple the amount Congress agreed upon. Trump is not likely to veto the bill, and even if he does not sign it, it will still become law in 10 days.
Traders and investors are still somewhat tentative as medical experts continue to assess the implications of the new strain of Covid-19 that has hit the U.K and has likely spread to other countries, including the U.S. Many experts believe current Covid-19 vaccines will still work on the new mutation, which is more easily transmissible.
European markets were upbeat on continued progress between the U.K. and the European Union on a smooth Brexit deal. Some reports said a deal could be reached on the matter as soon as today.
The U.S. dollar index is lower in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices slightly up and trading around $47.15 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.92%.
It’s a very busy day of U.S. economic data due for release Wednesday, including the weekly MBA mortgage applications survey, personal income and outlays, durable goods orders, the weekly jobless claims report, the U.S. house price index, new residential sales, the University of Michigan consumer sentiment survey, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. A near-term price uptrend has been at least temporarily negated with Monday’s spike down in prices. The shorter-term moving averages (4-, 9- and 18-day) are still 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 3,700.00 and then at the record high of 3,724.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,651.00 and then at 3,620.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are slightly higher in early U.S. trading. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the record high of 12,789.75 and then at 12,850.00. On the downside, shorter-term support is seen at the overnight low of 12,630.00 and then at 12,550.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 173 14/32 and then at this week’s high of 173 24/32. Shorter-term support lies at this week’s low of 172 5/32 and then at 171 28/32. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 138.03.0 and then at this week’s high of 138.08.0. Shorter-term technical support lies at this week’s low of 137.23.0 and then at last week’s low of 137.19.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are higher early today. Bulls are in solid technical control. 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 early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.2290 and then at the December high of 1.2303. Shorter-term support is seen at the overnight low of 1.2186 and then at this week’s low of 1.2158. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at Tuesday’s high of $47.96 and then at $49.00. Look for sell stops just below technical support at the overnight low of $46.16 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are mixed to higher in early U.S. pre-market trading. The grain markets bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily charts. The supply and demand fundamentals in the grains continue to favor the bulls. Dry weather in South American growing regions is also bullish for corn and soybeans. Traders today will examine the weekly USDA export sales report, out one day early this week due to the Friday Christmas holiday.
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