Tuesday, January 2–Jim Wyckoff’s morning markets report
In other news, there was more weak economic data coming out of China, as its official purchasing managers index (PMI) came in at 49.0 in December from 49.4 in November. The services sector PMI was unchanged at 49.3 in December. Readings below 50.0 suggest contraction in the sector.
The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $73.25 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.948%.
U.S. economic data due out Tuesday includes the U.S. manufacturing purchasing managers index (PMI), the global manufacturing PMI and construction spending.
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading but not too far below last week’s contract high and high for last year. 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 bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,841.50 and then at 4,875.00. Support for active traders is seen at 4,743.25 and then at 4,700.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading, on profit taking after hitting a contract high and new 2023 high last week. 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 bearish early today. Shorter-term technical resistance is seen at overnight high of 17,038.50 and then at the contract high of 17,165.25. On the downside, shorter-term support is seen at 16,758.50 and then at 16,600.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 124 21/32 and then at last week’s high of 125 30/32. Shorter-term support lies at 123 even and then at 122 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 112.26.5 and then at last week’s high of 113.12.0. Shorter-term technical support is seen at 112.00.0 and then at 111.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are solidly lower in early U.S. trading. Bulls still 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1078 and then at 1.1119. Shorter-term support is seen at 1.0950 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below 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 $75.00 and then at $76.18. Look for sell stops just below technical support at last week’s low of $71.25 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
There was no grain futures trading overnight due to the holiday Monday. Not much new recently. On tap today is the weekly USDA export inspections report. 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 and soybean oil, as all the soy 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