Friday, December 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings and five-week lows when the New York day session begins. The stock markets continue to suffer a hangover from a still-hawkish FOMC meeting this week that saw the Fed raise its main interest rate by 0.5% and stick with its rhetoric that more monetary policy tightening is needed to successfully tamp down inflation. The European Central Bank on Thursday also raised its main interest rate by a half-point and also sounded a hawkish tone on its monetary policy.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are lower and trading around $74.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.497%.
In overnight news, the Euro zone consumer price index for November came in at up 10.1%, year-on-year, which was close to market expectations and compares to a revised rise of 10.0% in the October report.
U.S. economic data due for release Friday is light and includes the U.S. flash manufacturing and services purchasing managers’ indexes.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower and hit a five-week low in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off suggests a near-term market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,934.50 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,871.25 and then at 3,825.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower and hit a five-week low in early U.S. trading. Tuesday’s price spike to a three-month high and then prices backing way off suggests a near-term market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-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 11,487.75 and then at 11,750.00. On the downside, shorter-term support is seen at the overnight low of 11,312.50 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 132 13/32 and then at 133 even. Shorter-term support lies at 131 even and then at 130 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 114.30.5 and then at this week’s high of 115.11.5. Shorter-term technical support lies at 114.08.0 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are a bit firmer in early U.S. trading. Prices hit a 5.5-month high Thursday. Bulls have the firm overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily chart. 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 to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0807 and then at 1.0850. Shorter-term support is seen at 1.0662 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading. 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 to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $76.57 and then at $78.00. Look for sell stops just below technical support at $73.00 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were narrowly mixed in overnight trading. Not much new this week. Corn and wheat bears have the overall near-term technical advantage amid downtrends in place on the daily bar charts. Soybeans bulls have the chart edge, led by the recent surge in soybean meal futures, and both markets are in uptrends 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