Tuesday, January 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward higher openings when the New York day session begins. Traders and investors are more upbeat to start the U.S. trading week, following the three-day holiday weekend. Market participants may become more cautious heading into the transition of U.S. power at midday Wednesday, amid high security in Washington, D.C. and at other state capitals around the country. Also, the U.S. just surpassed 400,000 Covid-19 deaths—the most in the world—and there are new concerns about the virus mutating. Those concerns are presently being offset by the vaccines that continue to roll out, albeit after a rocky start in the U.S.
The marketplace today will pay close attention to former Federal Reserve Chair and incoming U.S. Treasury Secretary Janet Yellen as she testifies before a U.S. Senate finance committee. Yellen is expected to talk about the Biden Administration’s spending plans to reinvigorate the U.S. economy from the pandemic’s damage. Last week Biden laid out a $1.9 trillion government spending and assistance plan.
The key “outside markets” today see the U.S. dollar index lower following the recent good rebound from a 2.5-year low scored earlier this month. Meantime, Nymex crude oil futures prices are firmer and are trading around $52.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.12%.
There is no major U.S. economic data due for release Tuesday.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading and not far below the recent record high. Bulls have the solid overall near-term technical advantage. A near-term price uptrend is in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the record high of 3,824.50 and then at 3,850.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,740.50 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 13,000.00 and then at the record high of 13,125.00. On the downside, shorter-term support is seen at the overnight low of 12,727.00 and then at 12,600.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage amid a price downtrend in place on the daily chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 169 8/32 and then at 169 22/32. Shorter-term support lies at the overnight low of 168 10/32 and then at 168 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower 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 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 136.31.5 and then at 137.06.0. Shorter-term technical support lies at 136.16.5 and then at 136.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading after hitting a six-week low overnight. Bulls have faded recently. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.2178 and then at last week’s high of 1.2239. Shorter-term support is seen at 1.2100 and then at the overnight low of 1.2067. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer in early U.S. trading. Bulls have the solid 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 early today. Look for buy stops to reside just above technical resistance at last week’s high of $53.93 and then at $54.50. Look for sell stops just below technical support at the overnight low of $51.76 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. The grain markets bulls still have the strong overall near-term technical advantage and are showing resilience. The grain futures are in major bull runs that could see still-higher prices, as speculators continue to show interest on the long side of the markets. However, expect much higher daily price volatility in the near term.
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