Thursday, January 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are also pointed toward narrowly mixed openings when the New York day session begins.
There are growing concerns in the marketplace regarding a potential U.S. government shutdown starting this weekend, as U.S. lawmakers cannot agree on a budget. This worry has limited buying interest in equities.
In other overnight news, China’s economy grew by 6.9% in 2017, up from 6.7% in 2016. Many China watchers had expected the world’s second-largest economy to contract in 2017.
The key outside markets on Thursday morning see the U.S. dollar index slightly higher on a corrective bounce after hitting a 3.5-year low earlier this week. The greenback bears still have the solid overall near-term technical advantage.
Meantime, Nymex crude oil prices are near steady after hitting a three-year high of $64.89 a barrel on Tuesday. The oil bulls are technically strong to suggest still more gains in the near term.
U.S. economic data due for release Thursday includes the weekly jobless claims report, new residential construction, the Philadelphia Fed business survey, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly higher in early U.S. trading and near this week’s contract and record high. Bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction. 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 and record high of 2,809.50 and then at 2,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,769.25 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract and record high earlier this week. The bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction soon. 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 early today. Shorter-term technical resistance is seen at the contract high of 6,845.75 and then at 6,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,750.00 and then at this week’s low of 6,729.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 technical resistance is seen at the overnight high of 150 8/32 and then at 151 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 149 16/32 and then at the contract low of 149 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit another contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 122.19.0 and then at 122.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 122.12.5 and then at 122.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly higher on tepid short-covering after hitting a 3.5-year low on Wednesday. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 90.765 and then at 91.000. Shorter-term support is seen at this week’s low of 89.960 and then at 89.750. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are near steady in early U.S. trading. Prices hit a three-year high on Tuesday. Bulls still have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at this week’s high of $64.89 and then at $65.00. Look for sell stops just below technical support at $63.00 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were again narrowly mixed overnight. Not much new. Grain market bears remain in overall near-term technical control. However, recent gains in soybeans hint that a market bottom is in place. Corn and wheat futures continue to languish not far above their recent lows, but more gains in those two markets this week would begin to suggest market bottoms are in place.