Monday, December 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins after key indexes hit record highs last week. Risk aversion has crept back into the marketplace to start the trading week. The U.S. is reportedly set to slap more economic sanctions on Chinese officials, in response to China’s crackdown on Hong Kong protesters. Markets are also a bit edgy on weekend news the U.K. and the European Union are still far apart on a smooth Brexit plan. Also, the U.S. and other parts of the world continued to be ravaged by Covid-19. Record daily cases and deaths in the U.S. continue to get reported, with California virtually locked down again.
One the bright side it appears U.S. congressional leaders are still moving closer to agreeing on a financial stimulus package for Americans. The package would be just under $1 trillion.
Meantime, China’s economy continues to power ahead as that country last spring clamped down on its population and locked them up, ostensibly defeating the virus in that country. Chinese exports rose 21.1% in November, year-on-year, the biggest rise in nine years. China’s imports were up 4.5% in the same period, but below market expectations.
The U.S. dollar index is higher early today and seeing a corrective bounce after hitting a 2.5-year low last week. The other important outside market sees January Nymex crude oil futures prices lower and trading around $46.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.94%.
U.S. economic data due for release Monday includes the employment trends index and consumer credit.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading on a mild corrective pullback after hitting a record high overnight. Bulls have the solid overall near-term technical advantage. 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 contract and record high of 3,697.25 and then at 3,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,664.25 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are slightly lower in early U.S. trading after hitting a record high overnight. 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 early today. Shorter-term technical resistance is seen at the overnight contract and record high of 12,563.50 and then at 12,600.00. On the downside, shorter-term support is seen at the overnight low of 12,473.00 and then at 12,400.00. 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, on short covering. Bears still have the firm near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 172 16/32 and then at 173 even. Shorter-term support lies last week’s low of 171 4/32 and then at the November low of 170 22/32. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears have the firm near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 137.20.0 and then at 137.24.0. Shorter-term technical support lies at last week’s low of 137.07.5 and then at 137.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading, on profit taking after hitting a 2.5-year high late last week. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2172 and then at last week’s high of 1.2208. Shorter-term support is seen at the overnight low of 1.2111 and then at 1.2072. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading, on profit taking after hitting an eight-month high last Friday. Bulls have the solid overall near-term technical advantage. 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 the overnight high of $46.25 and then at last week’s high of $46.68. Look for sell stops just below technical support at the overnight low of $45.36 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are lower in early U.S. pre-market trading. Raging Covid-19 in the U.S. and other parts of the world and new U.S. economic sanctions on China are hurting the grains to start the trading week. China has been a big buyer of U.S. grains in recent months. Traders will closely examine Monday morning’s weekly USDA export inspections 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