Monday, January 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Trader and investor risk aversion is not keen early this week, but neither is their risk appetite. Rising bond yields amid tighter monetary policies from major central banks of the world are giving the marketplace pause. Last week the Federal Reserve suggested it will raise U.S. interest rates three times in 2022, in order to curb rising inflation that is becoming more problematic.
The U.S. data point of the week will be Wednesday’s consumer price index report for December, which is expected to come in at up 7.1%, year-on-year.
The key “outside markets” today see Nymex crude oil futures prices slightly lower and trading around $78.75 a barrel. The U.S. dollar index is firmer early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.795%, which a pandemic era high.
U.S. economic data due for release Monday includes the employment trends index and monthly wholesale trade.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 bearish early today. Today, shorter-term technical support comes in at the overnight low of 4,650.00 and then at 4,625.00. Sell stops likely reside just below those levels. Resistance for active traders is seen at 4,700.00 and then at 4,725.00. Buy stops likely reside just above those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are lower and hit a 2.5-month low in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 15,669.00 and then at 15,800.00. On the downside, shorter-term support is seen at 15,400.00 and then at 15,300.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady in early U.S. trading after hitting a contract low overnight. Bears have the solid overall near-term technical advantage. Prices have been trending lower for five weeks. 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 156 even and then at 156 12/32. Shorter-term support lies at the overnight contract low of 154 19/32 and then at 154 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are near steady and hit a contact 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. 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 Friday’s high of 128.24.0 and then at 129.00.0. Shorter-term technical support lies at the overnight contract low of 127.30.0 and then at 127.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are 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 below 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 1.1376 and then at the December high of 1.1403. Shorter-term support is seen at last week’s low of 1.1287 and then at 1.1247. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $79.45 and then at last week’s high of $80.47. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures are mixed in early U.S. pre-market trading. The corn and soybean bulls have the firm overall near-term technical advantage, but wheat prices are trending lower on the daily bar charts. 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