Wednesday, December 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins, on some mild profit taking after two major indexes hit record highs on Tuesday. Upbeat traders and investors continue to look at a bright light at the end of a dark Covid-19 tunnel—even though there will be a few more rough months ahead. Very successful vaccines for the pandemic virus will be rolling out to some of the general public as soon as this month.
Also buoying marketplace sentiment are renewed talks among U.S. congressional leaders on a financial stimulus package for Americans. U.S. Treasury Secretary Mnuchin and Federal Reserve Chairman Powell will testify today before a U.S. House committee and will likely be asked about the stimulus package and its prospects.
The U.S. economic data point of the day at mid-week is the November ADP national employment report, expected to show a rise of 475,000 jobs. This report is the precursor to Friday morning’s U.S. employment situation report from the Labor Department. The key non-farm payrolls number in that report is expected to come in at up 440,000 workers.
The U.S. dollar index is firmer early today after hitting a 2.5-year low Tuesday. The other important outside market sees January Nymex crude oil futures prices near steady and trading around $44.50 a barrel. The OPEC oil cartel is meeting this week and will be discussing keeping its present production cuts. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.92%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the ISM New York report on business, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading and seeing some mild profit taking after hitting a record high Tuesday. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract and record high of 3,669.00 and then at 3,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 3,618.00 and then at this week’s low of 3,583.75. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly lower in early U.S. trading, on profit taking after hitting a contract and record high Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at the contract and record high of 12,507.00 and then at 12,600.00. On the downside, shorter-term support is seen at Tuesday’s low of 12,312.00 and then at this week’s low of 12,082.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading, on a corrective bounce from Tuesday’s solid losses. Bears have the near-term technical advantage. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 173 6/32 and then at 174 even. Shorter-term support lies at this week’s low of 172 16/32 and then at 172 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher in early U.S. trading, on a corrective bounce from Tuesday’s losses. Bears have the near-term technical advantage. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 137.21.0 and then at 137.28.0. Shorter-term technical support lies at this week’s low of 137.13.0 and then at 137.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are near steady in early U.S. trading and did hit a 2.5-year high overnight. 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 the overnight high of 1.2119 and then at 1.2150. Shorter-term support is seen at 1.2050 and then at 1.2000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are weaker in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 $44.76 and then at this week’s high of $45.80. Look for sell stops just below technical support at the overnight low of $43.92 and then at $43.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are steady to lower in early U.S. pre-market trading. The bulls are fading this week and need to step up and show fresh power very soon. The grain market bulls still have the overall near-term technical advantage. However, closes on Friday at or near their weekly lows would be a bearish signal to suggest near-term market tops are in place. Wheat and corn are especially in technical trouble this week.
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