Monday, January 8–Jim Wyckoff’s morning markets report
In weekend news, U.S. congressional leaders have agreed upon a bipartisan federal budget plan for the next year. The House and Senate now have about two weeks to pass the measure, which may not be easy.
The U.S. data points of the week will be the December consumer price index report on Thursday and the December producer price index report on Friday. U.S. inflation has cooled in recent months, which has allowed the Federal Reserve to back off on its tighter monetary policy. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are solidly lower and trading around $71.75 a barrel. Reports said Saudi Arabia has lowered the price of its oil to some of its customers, in a signal of a weaker demand outlook. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.038%.
U.S. economic data due out Monday includes the employment trends index and consumer credit.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls are fading to start 2024. 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 Friday’s high of 4,760.25 and then at 4,800.00. Support for active traders is seen at last week’s low of 4,702.00 and then at 4,675.00. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Friday’s high of 16,577.25 and then at 16,737.25. On the downside, shorter-term support is seen at last week’s low of 16,334.25 and then at 16,200.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Friday’s high of 123 7/32 and then at 124 even. Shorter-term support lies at last week’s low of 121 9/32 and then at 121 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 111.28.5 and then at 112.00.0. Shorter-term technical support is seen at the overnight low of 111.15.5 and then at last week’s low of 111.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are near steady in early U.S. trading. Bulls have the overall near-term technical advantage but have faded a bit. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.1031 and then at last week’s high of 1.1078. Shorter-term support is seen at last week’s low of 1.0908 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are solidly lower in early U.S. trading. 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at last week’s high of $74.24 and then at $75.00. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mostly weaker overnight. A firmer U.S. dollar index and lower crude oil prices are bearish outside markets for the grains early today. On tap today is the weekly USDA export inspections report. Charts are fully bearish for corn and wheat. Technicals are also bearish for soybeans, meal and soybean oil. All the grain markets are trending down on the daily bar charts. That means their path of least resistance remains sideways to lower.
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