Friday, December 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins, and not far below the record highs the S&P 500 and Nasdaq indexes set this week. Trader and investor attitudes are upbeat to end the trading week as it appears U.S. congressional leaders are moving closer to agreeing on a financial stimulus package for Americans. The package would be just under $1 trillion.
Record-high Covid-19 daily infections and deaths reported in the U.S. on Thursday did not dent marketplace enthusiasm much, nor have predictions the pandemic’s worst human impact will come in January and February, including U.S. deaths possibly doubling in the period, from the present level. The marketplace is clearly looking beyond the next few months and focusing on the highly successful vaccines that are already starting to be distributed to some in the U.S. and other countries.
The U.S. economic data point of the week is Friday morning’s U.S. employment situation report from the Labor Department. The key non-farm payrolls number in that report is expected to come in at up 440,000 workers. Wednesday’s U.S. ADP national employment report was a miss to the downside. A big miss from forecasts in Friday’s report is likely to move markets.
The U.S. dollar index is weaker early today and is trading near this week’s 2.5-year low. The other important outside market sees January Nymex crude oil futures prices higher and trading around $46.30 a barrel. Oil prices are supported late this week by the OPEC oil cartel and Russia only increasing their collective output by 500,000 barrels a day. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.93%.
Other U.S. economic data due for release Friday includes the international trade report, and manufacturing shipments, inventories and orders.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading and near this week’s record high. 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract and record high of 3,674.00 and then at 3,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Wednesday’s low of 3,634.25 and then at 3,600.00. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are slightly higher in early U.S. trading and near this week’s record high. 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 the contract and record high of 12,535.00 and then at 12,600.00. On the downside, shorter-term support is seen at Wednesday’s low of 12,319.00 and then at this week’s low of 12,082.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker 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 below the 9-day and 18-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 Thursday’s high of 173 10/32 and then at 174 even. Shorter-term support lies at 172 even and then at this week’s low of 171 22/32. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are slightly down 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 below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Thursday’s high of 137.26.0 and then at 138.00.0. Shorter-term technical support lies at 137.16.0 and then at this week’s low of 137.08.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading and hit another 2.5-year high overnight. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2208 and then at 1.2250. Shorter-term support is seen at the overnight low of 1.2170 and then at 1.2100. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are higher and hit an eight-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $46.68 and then at $47.00. Look for sell stops just below technical support at the overnight low of $45.61 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are mixed to weaker in early U.S. pre-market trading. The bulls have stabilized the markets late this week, after selling pressure earlier in the week. The grain market bulls still have the overall near-term technical advantage. However, closes on Friday at or near their weekly lows would be a bearish signal to suggest near-term market tops are in place. Wheat and corn are especially vulnerable from a near-term technical perspective.
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