Friday, December 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins, on tepid corrective rebounds and short covering after hitting six-week lows on Thursday. Trading was quieter overnight and volumes are likely to be low on this last trading day before the Christmas holiday over the weekend.
Stronger-than-expected U.S. economic data on Thursday was a wake-up call to traders and investors that the Federal Reserve is unlikely to stop tightening U.S. monetary policy until well into 2023. The better gross domestic product report also suggested the U.S. economy is not ready to slip into recession.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are up and trading around $79.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.714%.
U.S. economic data due for release Friday includes 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 slightly higher in early U.S. trading, on short covering after hitting a six-week low on Thursday. The 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 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 3,900.00 and then at this week’s high of 3,919.75. Support for active traders is seen at 3,800.00 and then at this week’s 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. 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 this week’s high of 11,411.00 and then at 11,500.00. On the downside, shorter-term support is seen at this week’s low of 10,870.50 and then at the November low of 10,746.75. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower 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 bearish early today. Shorter-term technical resistance is seen at 129 even and then at Tuesday’s high of 129 22/32. Shorter-term support lies at this week’s low of 127 19/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit a three-week low 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 bearish early today. Shorter-term resistance lies at Wednesday’s high of 113.29.0 and then at this week’s high of 114.05.5. Shorter-term technical support lies at 113.00.0 and then at 112.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are a bit firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are in a 2.5-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. Both are 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 1.0726 and then at the December high of 1.0807. Shorter-term support is seen at this 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 higher in early U.S. trading. Bulls are working on a fledgling price uptrend on the daily bar 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 bullish early today. Look for buy stops to reside just above technical resistance at $80.00 and then at $82.00. Look for sell stops just below technical support at Thursday’s low of $78.30 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were firmer in overnight trading. Corn bulls and bears are on a level overall near-term technical playing field. Wheat bears still have the overall near-term technical advantage. A major arctic blast in the U.S. midsection is boosting wheat futures, on notions the dormant crops could receive winterkill. Soybeans bulls have the chart edge, led by the recent surge in soybean meal futures, and both markets are in uptrends 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