Friday, January 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are in upbeat moods late this week on reports that surfaced Thursday afternoon that the U.S. is considering lowering or even eliminating its trade tariffs on China as a way to get that nation to make more trade concessions in the current trade war. The idea came from U.S. Treasury Secretary Steven Mnuchin, reports said. However, other reports said U.S. Trade Representative Robert Lighthizer is against the idea, while another report said the Trump administration is not considering lowering tariffs on Chinese goods imported into the U.S. Next week, Chinese and U.S. trade officials are scheduled to meet next week in Washington. The marketplace is taking this news as a positive and reckons President Trump is demanding his advisors get a trade deal done with China by early March.
The important outside markets today see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are firmer and trading just below $53.00 a barrel.
U.S. economic data due for release Friday includes industrial production and capacity utilization and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer and hit a four-week high overnight. Prices are in a fledgling uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 2,650.00 and then at 2,675.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,625.00 and then at 2,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are firmer in early U.S. trading. Prices are in a fledgling uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 this week’s high of 6,760.00 and then at 6,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,700.00 and then at 6,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower and hit a three-week low in early U.S. trading today. Bulls still have the overall near-term technical advantage, but are fading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 145 7/32 and then at this week’s high of 145 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at 144 16/32 and then at 144 even. 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 a three-week low in early U.S. trading. Bulls still have the overall chart advantage but are fading. 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 121.17.5 and then at 121.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 121.08.0 and then at 121.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly lower in early U.S. trading. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 95.925 and then at 96.250. Shorter-term support is seen at 95.480 and then at this week’s low of 95.070. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. Prices are in a fledgling uptrend on the daily bar 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 early today. Look for buy stops to reside just above technical resistance at the January high of $53.31 and then at $54.00. Look for sell stops just below technical support at $52.00 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were higher again overnight, on short covering and corrective rebounds from recent selling pressure, and on the upbeat assessment of the U.S.-China trade talks. The U.S. government closure has created a dearth of fresh fundamental news for the grain markets. The uncertainty over no fresh government data remains bearish.
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