Friday, January 12–Jim Wyckoff’s morning markets report
Meantime, China got some more dour economic news Friday as the world’s second-largest economy is sinking deeper into deflation, “spelling trouble for the whole world as demand falters,” reported Dow Jones Newswires today. China’s December consumer price index fell 0.3%, year-on-year. Meantime, China’s December exports were up 2.3%, year-on-year, while imports were up 0.2%. Those numbers were slightly better than expected. China reported its 2023 exports fell 3.6% on the year, while imports dropped 5.5% in the same period.
Following Thursday’s slightly higher-than-expected U.S. consumer price index report for December, today comes the U.S. producer price index report for December. The PPI is forecast up 0.1% from November versus an unchanged reading in November from October. The Federal Reserve has been generally pleased with cooling U.S. inflation—to the point of hinting of no more interest rate increases and possibly interest rate cuts in 2024. The Fed would like to see annual U.S. inflation rates of around 2%.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are sharply up and trading around $75.25 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.986%.
Other U.S. economic data due out Friday includes the USDA monthly supply and demand and quarterly grain stocks reports.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls still have the solid near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-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 the December contract high of 4,841.50 and then at 4,875.00. Support for active traders is seen at Thursday’s low of 4,772.75 and then at 4,750.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above with the 9-day and 18-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 17,057.00 and then at the contract high of 17,165.25. On the downside, shorter-term support is seen at Thursday’s low of 16,753.00 and then at Tuesday’s low of 16,657.25. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are a bit lower in early U.S. trading. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 123 15/32 and then at 124 even. Shorter-term support lies at this week’s low of 121 15/32 and then at last week’s low of 121 9/32. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are higher in lower in U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 112.16.0 and then at 113.00.0. Shorter-term technical support is seen at 112.00.0 and then at this week’s low of 111.15.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are weaker in early U.S. trading. Bulls have the 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 1.1040 and then at the January high of 1.1078. Shorter-term support at the January low of 1.0908 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are sharply higher and hit a two-week high in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $76.18 and then at $77.50. Look for sell stops just below technical support at the overnight low of $72.90 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
Grain futures prices were firmer overnight. Traders are awaiting Friday morning’s USDA monthly supply and demand and quarterly grain stocks reports. Charts remain fully bearish for corn and wheat. Technicals are also bearish for soybeans, meal and soybean oil. All the grain markets are trending down on the daily bar 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