Thursday, January 11–Jim Wyckoff’s morning markets report
Asian and European stock markets were mostly higher overnight. U.S. stock index futures are set to open slightly firmer when the New York day session begins. The U.S. stock index bulls have rebounded this week, following selling pressure the first week of the new year, and are now back near their contract and 12-month highs.
Traders are awaiting the U.S. data points of the week: the December consumer price index report on Thursday morning and the December producer price index report on Friday morning. 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.
In other news, the U.S. Securities and Exchange Commission voted Wednesday to allow bitcoin to be traded as an exchange traded fund (ETF).
The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are up and trading around $72.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.988%.
Other U.S. economic data due out Thursday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly up and very close to the recent contract and 12-month high in early U.S. trading. Bulls have the solid near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the December contract high of 4,841.50 and then at 4,875.00. Support for active traders is seen at Wednesday’s low of 4,786.00 and then at 4,750.00. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are slightly up in early U.S. trading and not far below the recent contract and 12-mont high. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above with the 9-day and 18-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 17,048.05 and then at the contract high of 17,165.25. On the downside, shorter-term support is seen at Wednesday’s low of 16,801.57 and then at Tuesday’s low of 16,657.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 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 moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 123 even and then at 124 even. Shorter-term support lies at 122 even and then at last week’s low of 121 9/32. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 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 moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 112.09.0 and then at 112.20.0. Shorter-term technical support is seen at the overnight low of 111.28.0 and then at this week’s low of 111.15.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are slightly firmer in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1031 and then at the January high of 1.1078. Shorter-term support is seen at Wednesday’s low of 1.0953 and then at the January low of 1.0908. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below 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 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: 6.0
GRAINS
Grain futures prices were mixed to firmer overnight. On tap today is the weekly USDA export sales report. Charts remain 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. Traders are looking ahead to Friday’s USDA monthly supply and demand and quarterly grain stocks reports.
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