Wednesday, January 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Risk appetite has receded a bit Wednesday. Omicron is rampant in the U.S. and other nations, which is causing worries the virus could again crimp global economies. There are reports U.S. government lawmakers have discussed another federal pandemic stimulus package for businesses that are still hurting from the economic effects of the virus.
In overnight news, the Euro zone December composite purchasing managers index (PMI) came in at 53.3 compared to a forecast for a reading of 53.4 and compares with a November number of 55.4.
The U.S. economic data pace picks up at mid-week, with the FOMC minutes due out this afternoon. Also, the ADP national employment report is released today. Other data out today include the weekly MBA mortgage applications survey, the U.S. services PMI, and the weekly DOE liquid energy stocks report.
The key “outside markets” today see Nymex crude oil futures prices near steady and trading around $77.00 a barrel. The U.S. dollar index is lower early today. The yield on the U.S. 10-year Treasury note is presently fetching 1.65%. U.S. bond yields have been on the rise for three weeks and have taken a big jump this week. Don’t be surprised to see renewed inflation concerns hit the marketplace in the near term and sap more risk appetite, as bond yields are likely to continue to rise.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still 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 early today. Today, shorter-term technical resistance comes in at the record high of 4,808.25 and then at 4,835.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,747.50 and then at 4,713.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are weaker 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 below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 16,350.00 and then at 16,500.00. On the downside, shorter-term support is seen at this week’s low of 16,139.50 and then at 16,000.00. 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, on a short-covering bounce. Bears still have the firm overall near-term technical advantage. Prices have been trending lower for four weeks. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 157 16/32 and then at 158 even. Shorter-term support lies at this week’s low of 156 13/32 and then at 156 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering. 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 bearish early today. Shorter-term resistance lies at Tuesday’s high of 129.19.0 and then at 129.24.0. Shorter-term technical support lies at this week’s low of 129.04.0 and then at 129.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below 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 December high of 1.1403 and then at the December high of 1.1417. Shorter-term support is seen at this week’s low of 1.1287 and then at 1.1247. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are near steady in early U.S. trading. Bulls have the 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 this week’s high of $77.64 and then at $78.00. Look for sell stops just below technical support at Tuesday’s low of $75.70 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are weaker in early U.S. pre-market trading. Choppy trading this week but the bulls are having the better week, so far. The corn and soybean bulls have the firm overall near-term technical advantage, but wheat prices are still trending lower on the daily bar charts. Look for rising inflation worries to support the grain futures in the near term, or longer.
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