Thursday, December 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed 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 sentiment worldwide has up-ticked a bit this week as China has significantly eased up on its strict Covid lockdown measures, suggesting the world’s second-largest economy may start to pick up steam at a faster pace now.
Traders are awaiting the next U.S. inflation data point, which is Friday morning’s 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.
In other news, a Barron’s headline today reads: “Bitcoin is stagnant…; crypto trading has fallen off a cliff.” The crypto bulls were not helped any this week when JP Morgan chief Jamie Dimon said the crypto currencies were a “sideshow” and owning crypto tokens is like “owning a pet rock.”
The key outside markets today see the U.S. dollar index firmer after hitting a 3.5-month low earlier this week. Nymex crude oil prices are a bit higher trading around $72.50 a barrel. Prices Wednesday hit an 11-month low. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.442%.
U.S. economic data due for release Thursday is light and includes the weekly jobless claims report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have the slight overall near-term technical advantage but are fading. 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 to bearish early today. Today, shorter-term technical resistance comes in at 4.000.00 and then at Tuesday’s high of 4,047.50. 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. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 11,800.00 and then at 12,000.00. On the downside, shorter-term support is seen at 11,500.00 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 lower in early U.S. trading, on a corrective pullback after hitting a 2.5-month high Wednesday. 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 technical resistance is seen at this week’s high of 132 even and then at 133 even. Shorter-term support lies at 131 even and then at 130 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. 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 resistance lies at this week’s high of 115.06.5 and then at 115.16.0. Shorter-term technical support lies at 114.16.0 and then at Wednesday’s low of 114.02.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are weaker in early U.S. trading. Bulls 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 to bearish 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 1.0500 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer in early U.S. trading, on 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 $71.75 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were firmer in overnight trading. Traders are awaiting this morning’s weekly USDA export sales 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. The next big data point for the grain markets is Friday’s monthly USDA supply and demand 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