Friday, January 26–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed overnight. U.S. stock index futures are set to open a bit weaker when the New York day session begins. The S&P and Nasdaq indexes have hit record highs this week as risk appetite in the general marketplace has up-ticked recently.
The U.S. data point of the day, if not the week, is the personal income and outlays report for December, including its inflation components. Personal income is seen up 0.3% from November. Consumer spending is forecast up 0.5% from November. The PCE core price index is seen up 3.0%, year-on-year. The PCE inflation numbers are said to be the Federal Reserve’s favorite inflation gauges.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are weaker and trading around $76.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.118%.
Other U.S. economic data due for release Friday includes pending home sales.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading after hitting a contract and record high Wednesday. Bulls have the solid overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. 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 contract high of 4,933.25 and then at 4,950.00. Support for active traders is seen at this week’s low of 4,874.25 and then at 4,841.50. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are weaker after hitting a contract and record high Wednesday. 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 with the 9-day and 18-day. The 9-day is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the contract high of 17,793.50 and then at 17,900.00. On the downside, shorter-term support is seen at this week’s low of 17,409.50 and then at 17,300.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading after hitting a six-week low Thursday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 121 5/32 and then at 122 even. Shorter-term support lies at this week’s low of 119 even and then at 118 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly firmer 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. 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 111.19.5 and then at 112.00.0. Shorter-term technical support is seen at the January low of 110.26.0 and then at 110.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. The shorter-term moving averages for the Euro are 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 for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0956 and then at 1.1000. Shorter-term support is seen at the overnight low of 1.0834 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading, on a corrective pullback after hitting a seven-week high Thursday. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $77.51 and then at $79.00. Look for sell stops just below technical support at Thursday’s low of $75.16 and then at Wednesday’s low of $73.94. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were lower overnight. Charts are 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. That means the path of least resistance for their prices remains sideways to lower.
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