Tuesday, January 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings and at or near record highs when the New York day session begins. “Risk-on” is the mantra of most traders and investors early in the new year. This comes despite the Omicron variant of the coronavirus still spreading like wildfire in many countries. The U.S. reported over 1 million new cases on Monday, which is a global record. Ideas of stronger U.S. and global economic growth in 2022, and that coronavirus is serious but manageable are keeping marketplace attitudes mostly upbeat.
The key “outside markets” today see Nymex crude oil futures prices up and trading around $76.65 a barrel. The U.S. dollar index is higher again early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.644%. U.S. bond yields have been on the rise for three weeks and have taken a big jump this week. Don’t be surprised to see renewed inflation concerns hit the marketplace in the near term and sap risk appetite, as bond yields are likely to continue to rise.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales reports, the ISM report on business manufacturing, the global manufacturing PMI, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher and hit a record high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the record high of 4,807.50 and then at 4,825.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,747.50 and then at 4,713.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 16,659.50 and then at the record high of 16,768.00. On the downside, shorter-term support is seen at Monday’s low of 16,292.00 and then at 12,145.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. Prices have been trending lower for four 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 158 2/32 and then at 159 even. Shorter-term support lies at the Monday’s low of 157 16/32 and then at 157 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit a six-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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 129.19.0 and then at 129.24.0. Shorter-term technical support lies at 129.06.0 and then at 129.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.1350 and then at the December high of 1.1403. Shorter-term support is seen at 1.1247 and then at the November low of 1.1221. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer in early U.S. trading. Bulls have the 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 bullish early today. Look for buy stops to reside just above technical resistance at the December high of $77.44 and then at $78.00. Look for sell stops just below technical support at Monday’s low of $74.27 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading. Choppy trading early this week. The corn and soybean bulls have the firm overall near-term technical advantage, but wheat bears have momentum as prices are now trending lower 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