Tuesday, December 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. It’s risk-on for traders and investors early this week. The first U.S. Covid-19 vaccines have been rolled out to health care professionals, to hopefully turn the tide on the pandemic, which is the worst respiratory pandemic in over 100 years, since the 1918 Spanish flu. The U.S. Congress appears to be making progress on a slightly slimmed-down ($748 billion) U.S. financial aid package for Americans. Also, reports this week say the U.K. and the European Union have extended the deadline to complete a deal on a smooth Brexit.
In overnight news, China’s economic recovery continued in November. China’s industrial production rose 7.0% versus 6.9% growth in October and 6.8% forecast, year-on-year. China’s retail sales rose 5.0% in November versus 4.3% growth in October and up 5.5% forecast, year-on-year. China’s economic growth comes as other major industrial economies are dealing with new lockdowns due to the spreading Covid-19. Total pandemic U.S. deaths this week surpassed 300,000, with some health experts predicting another 100,000 Americans will die from the virus by the end of January.
The U.S. Federal Reserve’s Open Market Committee (FOMC) meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace will parse words and comments from Fed officials, for clues on U.S. monetary policy direction in 2021. Most believe the Fed will keep its very accommodative monetary policy.
The U.S. dollar index is weaker early today after hitting another 2.5-year low on Monday. The other important outside market sees January Nymex crude oil futures prices slightly higher and trading around $47.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.9%.
U.S. economic data due for release Tuesday includes the Empire State manufacturing index, import and export prices, industrial production and capacity utilization, and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices are not far below last week’s record high. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below 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 Monday’s high of 3.691.50 and then at the contract and record high of 3,707.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,636.25 and then at last week’s low of 3,620.75. Wyckoff’s Intra-day Market Rating: 6.0
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 neutral early today. The 4-day moving average is below 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 Monday’s high of 12,559.50 and then at the contract high of 12,667.75. On the downside, shorter-term support is seen at Monday’s low of 12,388.00 and then at 12,300.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bears have the firm near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 173 31/32 and then at last week’s high of 174 9/32. Shorter-term support lies at Monday’s low of 172 16/32 and then at 172 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 138.04.0 and then at last week’s high of 138.07.0. Shorter-term technical support lies at Monday’s low of 137.23.0 and then at 137.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bulls remain in solid technical control. 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 early today. The Euro currency finds shorter-term technical resistance at the December high of 1.2208 and then at 1.2250. Shorter-term support is seen at Monday’s low of 1.2145 and then at 1.2100. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are near steady in early U.S. trading and close to last week’s eight-month high. Bulls have the solid 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 and 18-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 Monday’s high of $47.44 and then at last week’s high of $47.74. Look for sell stops just below technical support at Monday’s low of $45.69 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are mixed to weaker in early U.S. pre-market trading. Not much new this week. Price action has turned choppy. However, grain bulls have the overall near-term technical advantage. The weaker U.S. dollar index continues to work in favor of the grain market bulls.
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