Monday, December 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are also pointed toward mildly higher openings when the New York day session begins. It’s a quieter start to the trading week. However, activity will certainly pick up as the week progresses as all the major central banks hold monetary policy meetings this week. The Federal Reserve’s FOMC meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to announce the acceleration of asset purchases tapering on Wednesday as the U.S. faces the hottest inflation in nearly 40 years. For the European Central Bank meeting Thursday, little change in monetary policy is expected.
Risk appetite remains upbeat with just over two weeks before the new year begins. The new Omicron variant of the coronavirus appears to be much less than the worst-case scenario traders and investors were worried about two weeks ago. That has allowed stock markets to rally on bond yields to rise.
The key “outside markets” today see Nymex crude oil prices slightly lower and trading around $71.50 a barrel. The U.S. dollar index is higher early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.492%.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading and closed to the contract and record high. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below 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 4,735.00 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Friday’s low of 4,657.00 and then at 4,625.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at last week’s high of 16,438.75 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 16,322.50 and then at 16,200.00. 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 slightly up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Friday’s high of 162 1/32 and then at 162 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 30/32 and then at last week’s low of 160 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance is seen at Friday’s high of 130.23.0 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.07.5 and then at last week’s low of 129.31.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1346 and then at last week’s high of 1.1382. Buy stops likely reside just above those levels. Shorter-term support is seen at the December low of 1.1257 and then at the November low of 1.1221. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at last week’s high of $73.34 and then at $74.00. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were lower in overnight trading. The wheat market bulls have faded badly the past week, while the corn bulls have gained some strength and the soybean bulls are languishing in a sideways market mode. On tap today is the weekly USDA export inspections 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