Thursday, December 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly firmer in overnight trading. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. It’s been a very good week for the U.S. stock index bulls and Thursday sees a normal corrective pullback from the strong gains.
Traders are looking ahead to the U.S. data point of the week, Friday’s November consumer price index report, which is expected to come in up 0.7% from November and be up 6.7%, year-on-year.
China inflation data, released overnight, showed its producer price index up 12.9%, year-on-year, which was a decline from last month but still hotter than expected.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $72.00 a barrel. Crude oil bulls have also had a very good week. The U.S. dollar index is higher. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.494%. U.S. bond yields have risen this week, on ideas of a tighter U.S. monetary policy and stronger U.S. economic growth in the coming months.
U.S. economic data due for release Thursday is light and includes the weekly jobless claims report and monthly wholesale trade.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading on a routine downside correction from this week’s strong gains. 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 neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,705.00 and then at the contract high of 4,735.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,650.00 and then at 4,625.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are weaker in early U.S. trading on a corrective pullback from this week’s strong gains. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above 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 this 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 Wednesday’s low of 16,256.25 and then at 16,150.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are 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 technical resistance is seen at 161 16/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 160 12/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher 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 Wednesday’s high of 130.24.5 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 129.31.0 and then at 129.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are slightly weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are n neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1382 and then at last week’s high of 1.1417. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s 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: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading on a corrective pullback from this week’s solid gains. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $73.34 and then at $74.00. Look for sell stops just below technical support at Wednesday’s low of $70.91 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed to lower in overnight trading. Grain traders will continue to look to the key outside markets for direction—crude oil and the U.S. stock indexes, both of which generally favor the grain market bulls at present. Traders are awaiting Thursday’s USDA monthly supply and demand report and the weekly USDA export sales 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