Thursday, December 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were flat to weaker overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The marketplace is quieter this week following the Christmas holiday and just ahead of the new year.
The World Gold Council reports central bank gold buying at the highest rate since 1967, with Russia and China likely the leaders. “Sanctions on Russia and strained relations between the West and China have led to both countries adopting a policy of ‘de-dollarization’ to rely less on the policies of the U.S. central bank and government,” said broker SP Angel in a morning email dispatch. According to the World Gold Council, central banks bought 399 metric tons of gold in the third quarter, compared to 186 metric tons in the first quarter and 88 metric tons in the first quarter of 2022. Officially, Turkey led buying with 29 metric tons in the third quarter, though many central banks including China and Russia do not always report gold holdings.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are lower and trading around $77.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.875%.
U.S. economic data due for release Thursday includes the weekly jobless claims report and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are a bit firmer in early U.S. trading, on short covering after hitting a six-week low late last week. The shorter-term moving averages (4-, 9- and 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 3,900.50 and then at last week’s high of 3,919.75. Support for active traders is seen at 3,800.00 and then at the December low of 3,788.50. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are slightly up in early U.S. trading, on short covering after hitting a seven-week low Wednesday. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-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 11,000.00 and then at this week’s high of 11,183.75. On the downside, shorter-term support is seen at this week’s low of 10,758.75 and then at the October low of 10,595.25. 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. 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 bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 125 31/32 and then at 127 even. Shorter-term support lies at this week’s low of 124 22/32 and then at 124 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are near steady 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at Wednesday’s high of 112.22.0 and then at 113.00.0. Shorter-term technical support lies at 112.00.0 and then at 111.24.0. 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 up in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily chart. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0733 and then at the December high of 1.0807. Shorter-term support is seen at last week’s low of 1.0634 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are weaker in early U.S. trading. A fledgling price uptrend on the daily bar chart has stalled out. 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 bearish early today. Look for buy stops to reside just above technical resistance at $80.00 and then at this week’s high of $81.18. Look for sell stops just below technical support at the overnight low of $76.79 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Prices were lower overnight. Not much new this week. Corn bulls have the overall near-term technical advantage as prices are now trending higher. Wheat bears have the overall near-term technical advantage, but bulls are working on fledgling price uptrends that suggest near-term market bottoms are in place. Soybeans bulls still have the chart edge as prices are in an uptrend.
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