Monday, January 29–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
A feature in the marketplace recently is rising world bond market yields. That means rising interest rates and rising inflationary pressures. U.S. Treasury bonds and notes dropped to new contract lows in prices today.
The U.S. Dollar Index is higher in early U.S. trading Monday, on a corrective rebound after hitting a 3.5-year low last week. Meantime, Nymex crude oil prices are modestly lower and trading above $65.00 a barrel, on a corrective pullback after last week’s more-than-three-year high. A rising U.S. oil rig count, reported Friday, is also bearish for oil.
U.S. economic data due for release Monday includes personal income and outlays, the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are weaker in early U.S. trading, on profit taking after hitting a contract and record high overnight. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,878.50 and then at 2,890.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,850.00 and then at Friday’s low of 2,841.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are lower in early U.S. trading, after hitting a contract and record high overnight. The 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 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 neutral to bearish early today. Shorter-term technical resistance is seen at the contract high of 7,047.25 and then at 7,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,000.00 and then at 6,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are solidly lower and hit a 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 bearish early today. Shorter-term technical resistance is seen at 148 even and then at 148 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the contract low of 147 21/32 and then at 147 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
March U.S. T-Notes: Prices are sharply lower and hit a 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 bearish early today. Shorter-term resistance lies at 121.24.0 and then at 121.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 121.18.0 and then at 121.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
U.S. DOLLAR INDEX
The March U.S. dollar index is higher in early U.S. trading, on a corrective bounce from recent strong selling pressure that last week saw prices hit a more-than-three-year low. 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 bullish early today. The dollar index finds shorter-term technical resistance at 89.415 and then at the 89.905. Shorter-term support is seen at the overnight low of 88.955 and then at Friday’s low of 88.565. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are modestly lower in early U.S. trading and not far below last week’s more-than-three-year high. Bulls have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at last week’s high of $66.66 and then at $67.00. Look for sell stops just below technical support at $65.00 and then at $64.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were higher overnight. The recent rally in crude oil and the slumping U.S. dollar have been bullish for the grains. Some weather worries in Argentina are also supporting the grains.