Wednesday, January 24–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward firmer openings and new record highs when the New York day session begins.
Gold prices are solidly higher early today and hit a 4.5-month high overnight, amid a slumping U.S. dollar.
The key outside markets on Wednesday morning see the U.S. dollar index solidly lower and hitting a 3.5-year low. Meantime, Nymex crude oil prices are slightly higher and not far below last week’s more-than-three-year high.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the monthly house price index, the U.S. flash PMI, the U.S. services PMI, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly up in early U.S. trading and did poke to another contract and record high overnight. Bulls have the solid overall near-term technical advantage. However, the market is still 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 bullish early today. Today, shorter-term technical resistance comes in at 2,850.00 and then at 2,860.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,828.75 and then at 2,815.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are slightly higher in early U.S. trading and hit a contract and record high overnight. The bulls have the solid overall near-term technical advantage. However, the market is still 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 bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 6,986.25 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,955.00 and then at 6,919.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are weaker 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 149 16/32 and then at this week’s high of 149 22/32. Buy stops likely reside just above those levels. Shorter-term support lies at Tuesday’s low of 148 25/32 and then at the contract low of 148 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are weaker 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 early today. Shorter-term resistance lies at the overnight high of 122.17.5 and then at 122.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.10.0 and then at the contract low of 122.01.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is solidly lower in early U.S. trading and hit a more-than-three-year low overnight. 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.905 and then at 90.250. Shorter-term support is seen at the overnight low of 89.410 and then at 89.250. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
March Nymex crude oil prices are slightly higher in early U.S. trading and near the recent 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 the January high of $64.88 and then at $65.00. Look for sell stops just below technical support at $64.00 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed overnight. Not much new. Recent gains in soybeans and corn hint that market bottoms are in place. Wheat futures continue to languish not far above their recent lows. However, if corn and soybeans hold their gains, the downside will be limited for wheat, too.