Tuesday, January 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Traders and investors are more cautious this week, trying to adjust to a marketplace of tighter central bank monetary policies in 2022, amid rising inflation.
Federal Reserve Chairman Jerome Powell is scheduled to testify to a Senate banking committee today, regarding his nomination for a second term as Fed chair. He will surely be asked questions about the trajectory of Fed monetary policy and inflation prospects.
The U.S. data point of the week will be Wednesday’s consumer price index report for December, which is expected to come in at up 7.1%, year-on-year.
The key “outside markets” today see Nymex crude oil futures prices higher and trading around $79.35 a barrel. The U.S. dollar index is weaker early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.74%, which is down a bit from Monday’s pandemic high of just above 1.8%.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and chain store sales reports, the NFIB small business optimism index, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the firm overall 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 neutral early today. Today, shorter-term technical support comes in at the overnight low of 4,653.25 and then at 4,600.00. Sell stops likely reside just below those levels. Resistance for active traders is seen at 4,700.00 and then at 4,725.00. Buy stops likely reside just above those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage but have faded. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 15,800.00 and then at 15,900.00. On the downside, shorter-term support is seen at the overnight low of 15,564.75 and then at 15,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading in short covering after hitting a contract low Monday. Bears still have the solid overall near-term technical advantage. Prices have been trending lower for five weeks. 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 technical resistance is seen at the overnight high of 156 1/32 and then at 156 16/32. Shorter-term support lies at the overnight low of 155 13/32 and then at 155 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Monday. 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 neutral early today. Shorter-term resistance lies at 128.16.0 and then at 128.24.0. Shorter-term technical support lies at the contract low of 127.30.0 and then at 127.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bears have the solid overall near-term technical advantage amid recent sideways trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1376 and then at the December high of 1.1403. Shorter-term support is seen at last week’s low of 1.1287 and then at 1.1247. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a five-week-old price uptrend in place on the daily 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 to bullish early today. Look for buy stops to reside just above technical resistance at $80.00 and then at last week’s high of $80.47. Look for sell stops just below technical support at $79.00 and then at Monday’s low of $77.83. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mostly firmer in early U.S. pre-market trading. The big data point of the week is Wednesday’s monthly USDA supply and demand report. The corn and soybean bulls have the firm overall near-term technical advantage, but wheat prices are trending lower on the daily bar charts.
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