Wednesday, January 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Trader and investor risk appetite is not robust early in the new year, amid most major central banks that are still-hawkish on their monetary policies. However, risk aversion is not keen, either, due to hopes China’s economy, the second-largest in the world, will see improved growth after the Chinese government relaxed Covid restrictions.
In overnight news, it appears most of the U.S. airline industry has seen its flights suspended due to a computer malfunction of unknown nature. The first thing that comes to many market watchers’ minds is a major cyber attack from a foreign country that could prompt a retaliation from the U.S.
The key outside markets today see the U.S. dollar index slightly higher on a corrective bounce prices Monday hit a 6.5-month low. Nymex crude oil futures prices are modestly up and trading around $75.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.574%.
Traders are awaiting the next major U.S. inflation data point: Thursday’s consumer price index report for December. The CPI headline number is expected to come in at up 6.5%, year-on-year, which compares to the 7.1% rise reported in the November report.
U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,973.25 and then at 4,000.00. Support for active traders is seen at this week’s low of 3,891.50 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 11,385.50 and then at 11,500.00. On the downside, shorter-term support is seen at this week’s low of 11,094.00 and then at 11,000.00. 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 neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 130 1/32 and then at 131 even. Shorter-term support lies at this week’s low of 127 30/32 and then at 127 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 neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 114.23.5 and then at 115.00.0. Shorter-term technical support lies at this week’s low of 113.26.5 and then at 113.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are a bit firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. 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 at this week’s high of 1.0812 and then at 1.0850. Shorter-term support is seen at 1.0750 and then at this week’s low of 1.0689. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly higher in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $76.74 and then at $78.00. Look for sell stops just below technical support at this week’s low of $73.47 and then at the January low of $72.46. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Prices were mostly firmer overnight. Corn and wheat market bulls have faded recently to begin to suggest near-term market tops are in place. Soybean bulls remain more resilient, led by the surge in meal futures. Grain traders will continue to gauge general marketplace sentiment in their daily trading decisions. Risk-on trading days in the general marketplace would favor the grain market bulls, while keener risk aversion days would favor the grain market bears.
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