Friday, December 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Risk appetite has grown markedly this week, but after strong gains in the U.S. stock indexes earlier this week, the markets are seeing some normal pausing action late this week. It appears the Omicron variant has left center stage of the marketplace. However, as the holidays approach, the Delta strain of the coronavirus is surging in parts of the U.S.
Traders are awaiting Friday morning’s U.S. data point of the week: the November consumer price index report, which is expected to come in up 0.7% from November and up 6.7%, year-on-year. Those numbers, if realized, would be at a nearly 40-year high for U.S. inflation. Federal Reserve officials will be watching the CPI report very closely, ahead of their FOMC monetary-policy-setting meeting next week. The Fed has recently done an “about-face” on inflation prospects—going from saying it’s only transitory to new believing it’s not just temporary and may even become problematic.
The key “outside markets” today see Nymex crude oil prices higher and trading around $71.65 a barrel. Crude oil bulls have also had a very good week. The U.S. dollar index is higher early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.515%.
Other U.S. economic data due for release Friday includes real earnings, the monthly Treasury budget statement and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. It’s been a very good week for the bulls. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,705.00 and then at the contract high of 4,735.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,657.00 and then at 4,625.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have had the better week. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 16,438.75 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 16,123.50 and then at 16,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 161 14/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 160 12/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance is seen at the overnight high of 130.13.5 and then at 130.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 129.31.0 and then at 129.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are slightly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are n 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.1350 and then at this week’s high of 1.1382. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1257 and then at the November low of 1.1221. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bulls have had a good week. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $73.34 and then at $74.00. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to firmer in overnight trading. Grain traders will continue to look to the key outside markets for direction—crude oil and the U.S. stock indexes, both of which generally favor the grain market bulls at present. The wheat market bulls have faded badly this week, while the corn bulls have gained strength this week and the soybean bulls are languishing in a sideways market mode.
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