Friday, December 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion is keener heading into the weekend, amid worrisome developments. Even though the U.S. is ready to roll out the just-approved by the FDA Covid-19 vaccine to the public, the daily death toll from the virus continues to rise and hit records. Thursday there were over 3,000 deaths in the U.S., while at the same time some states are starting to clamp down tighter their restrictions on businesses and the public. It had been the case where the marketplace was looking over the horizon at the pandemic being quashed by the middle of 2021 and life being back close to normal by the end of next year. However, it appears the marketplace on this day is focusing on the very tough road that lies just ahead, which sees a very dark Covid winter for many the Northern Hemisphere countries.
Another negative on this last trading day of the week is that hopes have once again rapidly faded that the U.S. Congress will soon pass a financial aid package for Americans. Earlier this week attitudes on the matter were much more positive. Now it looks like no agreement between Democrats and Republicans is on the horizon.
And, negotiations between the U.K. and European Union regarding a smooth Brexit appear to be breaking down. Reports said U.K. Prime Minister Boris Johnson has warned Britons to prepare for a “hard Brexit.” Some analysts are still expecting a last-minute compromise before the U.K.-Euro zone economic ties expire on January 1. Still, the Bank of England said Friday it expects some market volatility and disruption to markets following the break-up of the two.
The U.S. dollar index is higher early today. The other important outside market sees January Nymex crude oil futures prices weaker and trading around $46.50 a barrel, after prices hit an eight-month high Thursday. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.88%.
U.S. economic data due for release Friday includes the producer price index and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading, on profit taking. 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 below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,667.00 and then at the contract and record high of 3,707.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,620.75 and then at 3,600.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading, on normal profit taking. Bulls still have the solid overall 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,412.75 and then at 12,500.00. On the downside, shorter-term support is seen at this week’s low of 12,217.00 and then at 12,100.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 174 4/32 and then at 175 even. Shorter-term support lies at the overnight low of 173 11/32 and then at 173 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. Bears still have the near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 138.04.0 and then at 138.08.0. Shorter-term technical support lies at the overnight low of 137.26.5 and then at Thursday’s low of 137.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are slightly lower in early U.S. trading. Bulls remain in solid technical control. The shorter-term moving averages for the Euro are neural early today, as the 4-day is even with 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 1.2193 and then at last week’s high of 1.2208. Shorter-term support is seen at this week’s low of 1.2090 and then at 1.2050. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly down in early U.S. trading after hitting an eight-month high Thursday. Bulls have the solid 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $47.29 and then at this week’s high of $47.74. Look for sell stops just below technical support at $46.00 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Bulls are squelched late this week amid keener risk aversion in the marketplace. Grain bulls have regained some footing this week. The Covid-19 pandemic in the U.S. and other parts of the world and worries about demand, especially from China, have dented the grains recently.
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