Tuesday, January 30–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The equities markets worldwide are a bit worried about rising bond yields. The U.S. 10-year note rose to a more-than-three-year high yield on Monday.
In overnight news, the Euro zone reported its fourth-quarter gross domestic product at up 0.6% from the third quarter and up 2.7%, year-on-year. Those numbers were in line with market expectations.
This is a busy events week for the marketplace. Tuesday evening President Trump delivers his state-of-the-union speech. The Federal Open Market Committee (FOMC) meets Tuesday and Wednesday, which will be Fed Chair Janet Yellen’s last meeting. And on Friday the monthly U.S. employment situation report from the Labor Department is due out.
The key “outside markets” on Tuesday morning see the U.S. Dollar Index lower. Meantime, Nymex crude oil prices are also lower and trading around $65.00 a barrel. A rising U.S. oil rig count, reported last Friday, is bearish for oil.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index, the consumer confidence index, and the FOMC meeting begins.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower in early U.S. trading, on profit taking after hitting a contract and record high Monday. Bulls still have the solid overall near-term technical advantage. However, the market is way short-term overbought and due for a decent downside correction. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,858.00 and then at the contract high of 2,878.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,831.00 and then at 2,825.00. 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, on profit taking after hitting a contract and record high Monday. The bulls still have the solid overall near-term technical advantage. However, the market is short-term overbought and due for a decent downside correction soon. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,006.50 and then at the contract high of 7,047.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,925.00 and then at 6,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are near steady and hit another contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 148 11/32 and then at Monday’s high of 148 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight contract low of 147 14/32 and then at 147 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are near steady and hit another contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 121.30.5 and then at Monday’s high of 122.04.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 121.17.0 and then at 121.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below 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 the overnight high of 89.480 and then at the 89.905. Shorter-term support is seen at 88.565 and then at last week’s low of 88.255. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are lower in early U.S. trading, on profit taking. Bulls still have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $65.56 and then at $66.00. Look for sell stops just below technical support at the overnight low of $64.67 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were firmer overnight. Grain market bulls have near-term technical momentum on their side. Some weather worries in Argentina are also supporting the grains.