Friday, December 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on corrective, profit-taking pullbacks after the S&P 500 and Dow soared to record highs Thursday.
Investors and traders are awaiting the U.S. Senate vote, likely today, on a tax-cut plan. The consensus is now that the bill will pass the Senate and eventually become law. That’s been a bullish element for the U.S. stock market late this week.
The U.S. dollar index is slightly lower in early U.S. trading. Greenback bears have the overall near-term technical advantage.
Nymex crude oil futures prices are firmer today, following the OPEC meeting that saw the cartel’s and Russia’s oil-production quotas extended. Oil bulls have the firm overall near-term technical advantage.
U.S. economic data due for release Friday includes the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales reports.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower in early U.S. trading, on a profit-taking pullback after hitting a contract and record high on Thursday. Bulls still have the solid overall near-term technical advantage. There are no early chart clues to suggest a market top is close at hand. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,647.75 and then at the contract high of 2,660.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,623.75 and then at 2,610.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are lower in early U.S. trading, on another corrective pullback from recent gains. Prices Tuesday hit a contract and record high. The bulls still have the firm 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,385.75 and then at 6,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,329.50 and then at this week’s low of 6,301.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on a corrective rebound from strong selling pressure seen earlier this week. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 152 30/32 and then at 153 10/32. Buy stops likely reside just above those levels. Shorter-term support lies at 152 even and then at the overnight low of 151 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
March U.S. T-Notes: Prices are higher in early U.S. trading, on a rebound from selling pressure earlier this week. Bears still have the 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 124.16.0 and then at 124.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.02.0 and then at this week’s low of 123.29.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly lower in early U.S. trading. Bears have the 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 93.130 and then at 93.500. Shorter-term support is seen at Thursday’s low of 92.375 and then at this week’s low of 92.130. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $58.30 and then at the November high of 59.05. Look for sell stops just below technical support at the overnight low of $57.29 and then at this week’s low of $56.75. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight, on short covering. Corn and wheat markets are still bearish. Soybean bulls still have some momentum. Still, I do not see strong downside price potential in corn and wheat, given their already low price levels.