Tuesday, December 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly firmer. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The global marketplace is still edgy following the weekend news of a newly discovered and more easily transmissible strain of Covid-19 in the U.K. Several countries have banned travel to and from Britain. Some health experts said they believe the current Covid vaccines could be effective on the new mutation of the virus. However, it’s too soon to tell if the current Covid vaccines will be as effective on the new strain as on the original form of the virus. The bottom line for the marketplace is keener uncertainty that leads to risk aversion.
Reports overnight said the U.K. and the European Union may be getting closer on reaching a smooth Brexit agreement.
The U.S. dollar index is higher in early U.S. trading on a corrective rebound after hitting a 2.5-year low last week. The other important outside market sees February Nymex crude oil futures prices lower and trading around $47.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.938%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the third estimate of third-quarter GDP, the Richmond Fed business survey, existing home sales and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. A near-term price uptrend has been negated with Monday’s spike down in prices. The shorter-term moving averages (4-, 9- and 18-day) are still 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 neutral early today. Today, shorter-term technical resistance comes in at 3,700.00 and then at Monday’s record high of 3,724.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,663.75 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 5.5
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 the record high of 12,789.75 and then at 12,850.00. On the downside, shorter-term support is seen at the overnight low of 12,639.50 and then at 12,600.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears still have the overall near-term technical advantage. 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 technical resistance is seen at the overnight high of 173 2/32 and then at 173 16/32. Shorter-term support lies at Monday’s low of 172 5/32 and then at 171 28/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 137.30.5 and then at Monday’s high of 138.08.0. Shorter-term technical support lies at Monday’s low of 137.23.0 and then at last week’s low of 137.19.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are slightly lower early today seeing mild profit taking from recent gains. Prices last week hit a nearly two-year high. Bulls are in solid technical control. 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 early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.2285 and then at last week’s high of 1.2303. Shorter-term support is seen at the overnight low of 1.2235 and then at 1.2200. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are lower in early U.S. trading. Bulls still have the firm 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $47.96 and then at $49.00. Look for sell stops just below technical support at Monday’s low of $46.25 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are steady to lower in early U.S. pre-market trading, on profit taking from recent gains and amid the risk-off trading atmosphere this week. The grain markets bulls still have the firm overall near-term technical advantage and the supply and demand fundamentals in the grains continue to favor the bulls. Dry weather in South American growing regions is also bullish for corn and soybeans.
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