Monday, January 3–Jim Wyckoff’s Morning Markets Report
On the first trading day of 2022, global stock markets were mostly firmer overnight. Markets in China, Japan and Australia were closed. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The S&P 500 stock index gained 27% in 2021, while notching 70 record highs on the year.
There is little risk aversion in the marketplace at present and that has the U.S. stock indexes trading not far below their record highs. Some market analysts believe 2022 will be a rockier year for the stock markets, what with rising inflation, central banks reining in their heretofore easy money policies, and the globe still doing battle with the pandemic.
The key “outside markets” today see Nymex crude oil futures prices up and trading around $76.00 a barrel. The U.S. dollar index is higher early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.541%. U.S. bond yields have been on the rise for three weeks.
U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers index (PMI) and construction spending.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher and near last week’s record high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Today, shorter-term technical resistance comes in at the record high of 4,799.75 and then at 4,825.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,750.50 and then at 4,713.25. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher in early U.S. trading. 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 the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 16,500.00 and then at 16,600.00. On the downside, shorter-term support is seen at Friday’s low of 16,313.75 and then at 12,145.25. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the slight overall near-term technical advantage. Prices have been trending lower for four weeks. 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 the overnight high of 160 5/32 and then at Friday’s high of 160 18/32. Shorter-term support lies at the overnight low of 159 20/32 and then at last week’s low of 159 1/32. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit a three-week low 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 bearish early today. Shorter-term resistance lies at the overnight high of 130.11.0 and then at 130.18.5. Shorter-term technical support lies at the overnight low of 130.02.5 and then at 130.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading. Bears have the overall near-term technical advantage but trading has been choppy and sideways, to begin to suggest a market bottom is in place. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the December high of 1.1403 and then at 1.1417. Shorter-term support is seen at the overnight low of 1.1351 and then at 1.1300. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. Bulls have the 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the December high of $77.44 and then at $78.00. Look for sell stops just below technical support at Friday’s low of $74.95 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are solidly higher in early U.S. pre-market trading. The bulls are out of the gate strong for the new year, on speculative fund buying amid bullish technicals. The “inflation trade” appears to be gaining steam early this year and that is also bullish for the grains. On tap today is the weekly USDA export inspections report.
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