Monday, December 9–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The world marketplace is seeing just a bit of risk aversion to start the trading week, following downbeat economic data coming out of China, the world’s second-largest economy. China’s exports fell 1.1% in November, year-on-year, including shipments to the U.S. declining 23% in the period. China’s exports were seen up 1.0% in November. Imports were up 0.3% in the same period, and were expected to be unchanged.
The U.S. economic highlight of the week is the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to make no changes in its monetary policy. The European Central Bank also meets on monetary policy Thursday.
Goldman Sachs is recommending investors buy some more gold in the coming months, due to stubbornly low global bond yields, the higher potential for stock market turbulence and the keener uncertainty of the 2020 U.S. presidential election.
The key “outside markets” today see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are lower and trading around $58.75 a barrel.
U.S. economic data due for release Monday is light and includes the employment trends index. The pace report picks up rapidly Tuesday and through the rest of the week.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with 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 contract high of 3,159.75 and then at 3,175.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 3,125.00 and then at 3,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly down in early U.S. trading. Bulls have the solid near-term technical advantage. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 8,431.00 and then at the contract high of 8,479.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 8,350.00 and then at 8,330.00. Sell stops are likely located 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 higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Friday’s high of 158 22/32 and then at 159 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 18/32 and then at last week’s low of 157 5/32. 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. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at the overnight low of 128.27.0 and then at last week’s low of 128.21.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 129.08.0 and then at 129.14.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The March U.S. dollar index is weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. The shorter-term moving averages for the dollar index are bearish early today, 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 97.275 and then at 97.500. Shorter-term support is seen at last week’s low of 96.820 and then at 96.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are weaker in early U.S. trading, on a corrective pullback from recent good gains that pushed prices to a 2.5-month high Friday. Bulls have the near-term technical advantage and are keeping in place a 10-week-old uptrend on the daily bar chart. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $59.23 and then at last week’s high of $59.85. Look for sell stops just below technical support at $58.00 and then at $57.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were mixed overnight. Corn was down around 1 cent, soybeans around 3 cents up and wheat 1 to 2 cents down. Traders are awaiting Tuesday’s monthly USDA’s supply and demand report, although no updates on the size of the US corn and soybean crops will be made in this report. Those figures will come in the January report. December 15 looms as the next inflection point for the U.S.-China trade talks, as that’s when new U.S. tariffs are scheduled to go into effect. Grain traders are also looking at weather patterns in South American growing regions. There are no major problems at this time, with soil moisture adequate in most crop regions. The near-term technical postures for corn and soybeans remain bearish, with wheat being neutral to slightly bullish on the charts.
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