Thursday, December 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Once again, the U.S. stock index bulls have shown keen resilience by rallying their markets after steep sell offs. Risk appetite has up-ticked significantly from the beginning of the week. The news on the Omicron variant of the coronavirus has become more upbeat as the week progressed—from the U.S. Food and Drug Administration approving a pill that greatly reduces the effects of the virus, to studies showing Omicron is not as potent as the other strains, to early reports Omicron will run its course rapidly.
The key “outside markets” today see Nymex crude oil prices slightly higher and trading around $73.00 a barrel. The U.S. dollar index is near steady early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.469%.
The U.S. data point of the week will be today’s report on personal income and outlays for November. The closely watched PCE price index component of the report is expected to be up 0.6% from October and up 5.0%, year-on-year. If this inflation data runs hot, markets may react.
Look for quieter trading and lower volumes today, as many traders shut down their screens and turn their attention to the Christmas holiday. Markets are closed on Friday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, personal income and outlays, durable goods orders, new residential sales, 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 and not far below the recent contract and record high. Once again, bulls have shown keen resilience and have regained the firm near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,743.25 and then at 4,775.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,650.00 and then at Wednesday’s low of 4,622.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 16,300.00 and then at 16,400.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 16,100.00 and then at 16,000.00. Sell stops likely reside 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 weaker in early U.S. trading. 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 technical resistance is seen at the overnight high of 161 18/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 160 14/32 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 weaker in early U.S. trading. 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 is seen at the overnight high of 130.26.0 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.16.0 and then at 130.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. However, prices have been trading sideways at lower levels for nearly four weeks. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the December high of 1.1388 and then at 1.1417. Buy stops likely reside just above those levels. Shorter-term support is seen at the December low of 1.1247 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 slightly higher and hit a four-week high in early U.S. trading. 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 bullish early today. Look for buy stops to reside just above technical resistance at $74.00 and then at $75.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to weaker in overnight trading, on mild corrective pullbacks after solid gains posted this week. The grain market bulls have strength and prices may trend sideways to higher into the new year, and maybe longer. On tap today is the weekly USDA export sales report.
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