Monday, December 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly weaker openings when the New York day session begins. Shaky U.S.-China trade talk prospects and new documents released late last week more strongly suggesting very high-level Trump presidential campaign staffers colluded with Russia have traders and investors uneasy to start the trading week.
Meantime, Brexit turmoil and uncertainty regarding when and how the U.K. will depart the European Union have European stock and financial markets unsettled. The U.K. Parliament on Tuesday will vote on an exit plan proposed by Prime Minister May, which is expected to be rejected.
In overnight news, the latest official Chinese trade data showed the world’s second-largest economy continuing to slow down in its rate of growth, as total exports were up a much-lower-than-expected 5.4% in November, year-on-year—and at an eight-month low. Imports also missed expectations significantly and were up only 3.0% in the same period, versus up 21.4% in October.
The key outside markets today find the U.S. dollar index firmer. Meantime, Nymex crude oil prices are lower and trading around $51.86.
U.S. economic data due for release Monday is light and includes the employment trends index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading today and hit a six-week low overnight. Bears are in technical command. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 2,650.00 and then at 2,675.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the October low of 2,609.50 and then at 2,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are lower in early U.S. trading. Bears are in technical control. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 6,650.00 and then at 6,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,579.00 and then at 6,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices were firmer overnight and hit a 3.5-month high. Bulls are in solid technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 143 28/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 6/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: The market is near steady after hitting a contract high overnight. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight contract high of 120.30.0 and then at 121.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.19.5 and then at 120.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 96.350 and then at last week’s high of 96.610. Shorter-term support is seen at last week’s low of 95.750 and then at 95.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading today. Bears are in firm overall near-term technical control. There are still no early clues that a market bottom is close at hand. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $52.81 and then at $54.00. Look for sell stops just below technical support at $51.00 and then at $50.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were weaker overnight. Traders will closely examine this morning’s weekly USDA inspections report. There are new worries about any agreement forthcoming on the U.S.-China trade talks, and that’s bearish for the grains at present. The grain market bears have the overall near-term technical advantage, but it does appear corn and soybean prices have put in market bottoms.
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