Friday, December 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock index bulls have faded this week as near-term price uptrends on the daily bar charts have been negated. However, risk appetite this week increased mildly as China has eased up on its strict Covid lockdown measures, suggesting the world’s second-largest economy may start to grow at a faster pace.
Traders are awaiting the U.S. data point of the week Friday morning: the producer price index report for November. PPI is seen coming in at up 0.2% from October—the same rise as seen in last month’s PPI report.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are modestly higher trading around $72.00 a barrel. Prices Thursday hit an 11-month low. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.492%.
Other U.S. economic data due for release Friday includes monthly wholesale trade 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, on short covering following this week’s selling pressure. Bulls have the slight overall near-term technical advantage but have faded this week. A seven-week-old uptrend on the daily bar chart has been negated. 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 resistance comes in at Tuesday’s high of 4,047.50 and then at this week’s high of 4,107.50. Support for active traders is seen at this week’s low of 3,945.75 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are slightly higher in early U.S. trading, on short covering. Bulls and bears are on a level overall near-term technical playing field. 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 average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 12,000.00 and then at this week’s high of 12,124.25. On the downside, shorter-term support is seen at this week’s low of 11,535.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices hit a 2.5-month high Wednesday and bulls have the technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 132 even and then at 133 even. Shorter-term support lies at 130 even and then at 129 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 115.06.5 and then at 115.16.0. Shorter-term technical support lies at 114.00.0 and then at this week’s low of 113.25.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are slightly weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar chart. 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 neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0674 and then at 1.0700. Shorter-term support is seen at this week’s low of 1.0521 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly firmer in early U.S. trading, on tepid short covering after hitting an 11-month low Wednesday. Bears have the solid overall near-term technical advantage. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below 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 $75.00 and then at $77.00. Look for sell stops just below technical support at this week’s low of $71.12 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mostly slightly firmer in overnight trading. Traders are awaiting this morning’s monthly USDA supply and demand report. Corn bears have the overall near-term technical advantage. Wheat bears have the solid near-term technical advantage. Soybean bulls are holding the near-term technical advantage, mainly because meal futures are surging. Grain traders in the near term will focus on the outside markets and on risk appetite in the marketplace.
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