Friday, December 22–Jim Wyckoff’s morning markets report
The U.S. economic data point of the day is the personal income and outlays report for November and its personal consumption expenditures (PCE) inflation numbers, which the Federal Reserve watches closely. The core PCE index is expected to be up 3.3%, year-on-year compared to up 3.5% in the October report.
The Houthi missile and drone attacks on random ships in the Red Sea have prompted renewed inflation worries. And there are also worries about drought impacting the Panama Canal. Barrons today reported “ocean freight rates are surging, putting pressure on companies that rely on cheap shipping.” A U.S.-led military contingent is set to guard the Red Sea shipping route, but major shippers are leery that the contingent can stop every attack.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are firmer and trading around $74.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.867%.
Other U.S. economic data due out today includes durable goods orders, new residential sales and the University of Michigan consumer sentiment survey.
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Prices hit a contract high and yearly high early Wednesday. However, prices then scored a bearish “key reversal” down, which is one clue that a market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are still 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,830.75 and then at 4,850.00. Support for active traders is seen at this week’s low of 4,743.25 and then at 4,700.00. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices Wednesday scored a bearish “key reversal” down, which is one clue that a market top is in place. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 17,000.00 and then at the contract high of 17,073.50. On the downside, shorter-term support is seen at this week’s low of 16,758.50 and then at 16,600. 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. Prices hit a four-month high Thursday. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 124 30/32 and then at 126 even. Shorter-term support lies at 124 even and then at this week’s low of 123 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher in early U.S. trading. Prices hit a four-month high Thursday. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 113.04.5 and then at 113.16.0. Shorter-term technical support is seen at 112.16.0 and then at this week’s low of 112.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are firmer and hit a three-week high in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the November high of 1.1070 and then at 1.1100. Shorter-term support is seen at 1.1000 and then at this week’s low of 1.0935. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-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 this week’s high of $75.37 and then at $77.00. Look for sell stops just below technical support at Thursday’s low of $72.44 and then at this week’s low of $70.99. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were near steady overnight. Look for quieter pre-holiday trading today. Charts remain overall bearish for corn and wheat, but the recent price action in wheat markets suggest price bottoms are in place. Technicals are bearish for soybeans and fully bearish for meal as those 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