Tuesday, December 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were higher in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The worst fears of the Omicron variant are not materializing, so far, and risk appetite is back on the table for the marketplace, for now. Oil prices are also rallying and U.S. Treasury bond yields are rising on ideas U.S. and global economic growth will not be seriously impacted by Omicron.
Traders and investors are keeping an eye on a phone call today between U.S. President Biden and Russian President Putin. The West thinks the Russians might be poised to invade Ukraine, as Russian troops are gathered near the Ukraine-Russia border.
In overnight news, the Euro zone’s third-quarter gross domestic product came in at up 2.2% from the second quarter and up 3.9%, year-on-year. Those numbers were in line with market expectations.
In other news, China’s November exports were up 22%, year-on-year, while its imports were up 31.7% in the month. Both numbers handily beat market expectations.
The key “outside markets” today see Nymex crude oil prices solidly higher again and trading around $71.50 a barrel. The U.S. dollar index is slightly higher. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.441%.
U.S. economic data due for release Tuesday includes the weekly chain store index and Johnson Redbook retail reports, the international trade report, revised productivity and costs, the IBD/TIPP economic optimism index and consumer credit.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading. Bulls have regained momentum this week. The shorter-term moving averages (4-, 9- and 18-day) are still 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 bullish early today. Today, shorter-term technical resistance comes in at 4,675.00 and then at 4,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,587.25 and then at this week’s low of 4,531.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 7.0
March Nasdaq index futures: Prices are solidly higher in U.S. trading. Bulls have regained momentum this week. Shorter-term moving averages (4- 9-and 18-day) are still 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 bullish early today. Shorter-term technical resistance is seen at 16,200.00 and then at 16,300.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 15,824.50 and then at last week’s low of 15,538.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls are fading this week. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 162 20/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at 161 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are near steady 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 bearish early today. Shorter-term resistance is seen at the overnight high of 130.25.5 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.16.0 and then at 130.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are weaker 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 even with the 9-day. The 9-day is below 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 this week’s high of 1.1341 and then at last week’s high of 1.1417. Buy stops likely reside just above those levels. Shorter-term support is seen at last 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: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are again solidly higher in early U.S. trading. Bulls have gained momentum this week. The shorter-term moving averages are still 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 $73.00 and then at $74.00. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures were mixed to firmer in overnight trading. There is keener risk appetite in the marketplace early this week and that is bullish for the grains. Grain traders will continue to look to the key outside markets for direction—crude oil and the U.S. stock indexes. Big gains in crude so far today should support early buying interest in the grains.
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