Tuesday, December 6–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. A stronger-than-expected U.S. manufacturing report on Monday reinforced notions the Federal Reserve will have to keep its monetary policy tighter for longer. That helped to pressure the stock market and pushed the U.S. dollar index and U.S. Treasury yields higher. The ISM report also fell into the camp of those market watchers who think the U.S. may be able to avoid an economic recession.
In overnight news, Chinese Communist party officials have admitted that the public protests prompted the Chinese government to relax its Covid restrictions.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are weaker and trading around $76.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.573%.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook retail sales report and the U.S. international trade report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. 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 Monday’s high of 4.107.50 and then at last week’s high of 4,142.50. Support for active traders is seen at 4,000.00 and then at 3,974.50. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the slight 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 this week’s high of 12,124.25 and then at last week’s high of 12,257.75. On the downside, shorter-term support is seen at Monday’s low of 11,861.75 and then at 11,700.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at last week’s high of 130 9/32 and then at 131 even. Shorter-term support lies at Monday’s low of 128 12/32 and then at 128 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. 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 neutral to bearish early today. Shorter-term resistance lies at last week’s high of 114.28.5 and then at 115.00.0. Shorter-term technical support lies at 114.00.0 and then at 113.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar 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 bullish early today. The Euro currency finds shorter-term technical resistance Monday’s high of 1.0674 and then at 1.0700. Shorter-term support is seen at 1.0550 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading. Bears have the overall near-term technical advantage and have gained downside momentum. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $77.88 and then at $80.00. Look for sell stops just below technical support at $75.00 and then at the December low of $73.60. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed in overnight trading. Corn bears have the overall near-term technical advantage. Wheat bears have the solid near-term technical advantage. Soybean bulls are holding the slight near-term technical advantage, mainly because meal futures are surging. Grain traders in the near term will focus on the outside markets and on risk appetite in the marketplace. The next big data point for the grain markets is Friday’s monthly USDA supply and demand report.
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