Monday, December 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. It’s a quieter start to the trading week—the week before the Christmas holiday. Reports say the relaxed Covid restrictions in China have caused a surge in infections in the world’s most populous country. Traders will continue to closely monitor this situation. Some China watchers are saying the Covid infections and deaths situation in China could become very bad in the coming few months.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are slightly up and trading around $74.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.522%.
U.S. economic data due for release Monday is light and includes the NAHB housing market index.
–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 five-week low last Friday and closing at a technically bearish weekly low close. Recent price action suggests a near-term market top is in place. 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 Friday’s high of 3,934.50 and then at 4,000.00. Support for active traders is seen at last week’s low of 3,855.25 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are firmer in early U.S. trading on short covering after hitting a five-week low last Friday and closing at a technically bearish weekly low close. Recent price action suggests a near-term market top is in place. 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 11,500.00 and then at 11,700.00. On the downside, shorter-term support is seen at last week’s low of 11,275.00 and then at 11,000.00. 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. Prices are still in a six-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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 131 1/32 and then at 132 even. Shorter-term support lies at 130 even and then at 129 11/32. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a six-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 bearish early today. Shorter-term resistance lies at Friday’s high of 114.30.5 and then at the December high of 115.11.5. Shorter-term technical support lies at Friday’s low of 114.06.0 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are slightly up 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 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 to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0726 and then at the December high of 1.0807. Shorter-term support is seen at the overnight low of 1.0649 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly up 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 bullish early today. Look for buy stops to reside just above technical resistance at Friday’s high of $76.57 and then at $78.00. Look for sell stops just below technical support at $73.00 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to lower in overnight trading. Not much new, overall. On tap today is the weekly USDA export inspections report. Corn and wheat bears have the overall near-term technical advantage as downtrends are in place on the daily bar charts. 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