Thursday, January 21–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings and new record highs when the New York day session begins. The marketplace is more upbeat following the peaceful transition of U.S. power on Wednesday, with no civil unrest that some had feared would occur. It’s expected President Bident will quickly act with Congress to get his $1.9 trillion stimulus plan rolling, and that markets also like that. It’s also a big corporate earnings week in the stock market, with most of those reports being upbeat. For now, traders and investors have pushed aside the still-raging Covid-19 pandemic in the U.S. and other countries. In the U.S. the death toll has surpassed 400,000, with many more lives likely to be lost in the coming weeks. New strains of Covid are also a worry amid hopes that vaccine distribution will dramatically pick up with the new U.S. administration.
The key “outside markets” today see the U.S. dollar index lower as bulls are fading this week following the recent good rebound from a 2.5-year low scored earlier this month. The main rival to the greenback, the Euro currency, is also in a mild tailspin at present. The weaker dollar and weaker Euro, which usually trade divergently, suggest the “commodity” currencies such as the Australian and Canadian dollars are the better performers. Meantime, Nymex crude oil futures prices are lower and trading around $53.00 a barrel, but still not far below the recent 10-month high. The yield on the benchmark 10-year U.S. Treasury note stands at 1.09%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and new residential construction.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading and hit a new record high. Bulls have the solid overall near-term technical advantage. A near-term price uptrend is firmly in place 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 3,859.75 and then at 3,880.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,825.00 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher in early U.S. trading and hit another record high. 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 13,392.00 and then at 13,500.00. On the downside, shorter-term support is seen at 13,200.00 and then at 13,100.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady 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 above the 9-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 this week’s high of 169 12/32 and then at 169 22/32. Shorter-term support lies at this week’s low of 168 10/32 and then at 168 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 137.02.0 and then at 137.08.0. Shorter-term technical support lies at Wednesday’s low of 136.25.5 and then at this week’s low of 136.21.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. Bulls have faded recently but have stabilized the market late this week. The shorter-term moving averages for the Euro are still 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 this week’s high of 1.2174 and then at last week’s high of 1.2239. Shorter-term support is seen at the overnight low of 1.2121 and then at Wednesday’s low of 1.2091. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker 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 neutral early today as the 4-day is even with the 9-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 January high of $53.94 and then at $55.00. Look for sell stops just below technical support at this week’s low of $51.81 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading, on good rebounds from this week’s price pressure. The grain markets bulls still have the solid overall near-term technical advantage. How prices close on Friday—nearer the weekly highs or weekly lows—would be a good clue on the likely direction of the near-term price trends.
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