Thursday, January 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward near steady openings when the New York day session begins. The marketplace was more subdued overnight as traders are awaiting a major U.S. inflation data point: Thursday morning’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. Said analyst Craig Erlam of OANDA: “This inflation print has been the main topic of conversation all week. The U.S. jobs report last Friday changed the dynamic in the markets and ensured that not only was this CPI report going to be important but in all likelihood pivotal ahead of next month’s Fed meeting.” If the CPI headline number is a big miss from the consensus forecast, look for very active trading in many markets in the immediate aftermath of the 8:30 a.m. EST release of the report.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are higher and trading around $78.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.535%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls are having a good week. 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at 4,000.00 and then at 4,050.00. Support for active traders is seen at Wednesday’s low of 3,934.50 and then at this week’s low of 3,891.50. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are near steady in early U.S. trading and hit a three-week high overnight. 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 bullish early today. Shorter-term technical resistance is seen at 11,500.00 and then at 11,750.00. On the downside, shorter-term support is seen at Wednesday’s low of 11,239.75 and then at this week’s low of 11,094.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading. 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 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 129 even and then at this week’s low of 127 30/32. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are slightly higher in early U.S. trading. 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 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: 5.5
EURO CURRENCY
The March Euro currency futures are a bit weaker 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 1.0822 and then at 1.0900. Shorter-term support is seen at 1.0750 and then at this week’s low of 1.0689. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. 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 bullish early today. Look for buy stops to reside just above technical resistance at $79.00 and then at $80.00. Look for sell stops just below technical support at $77.00 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Prices were higher overnight. On tap today is the weekly USDA export sales report and the monthly USDA supply and demand report. The monthly USDA report is likely to prompt significant moves in the grain markets after its 12 noon EST release. 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.
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