Thursday, December 28–Jim Wyckoff’s Morning Markets Report
Note: I am on vacation late this week. My friend and fellow analyst Ken Seehusen is producing my morning and afternoon reports. Ken’s format is a bit different than mine, but I think you will enjoy and benefit from his work.
The STOCK INDEXES
The STOCK INDEXES: The March NASDAQ 100 was higher overnight and sets the stage a higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 16,627.59 would signal that a short-term top has been posted. First resistance is the overnight high crossing at 17,158.50. Second resistance is unknown. First support is the 20-day moving average crossing at 16,627.59. Second support is the 50-day moving average crossing at 15,948.44.
The March S&P 500 was slightly lower overnight and sets the stage for a slightly lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 4728.52 would signal that a short-term top has been posted. First resistance is the overnight high crossing at 4841.50. Second resistance is unknown. First support is last-Wednesday’s low crossing at 4743.25. Second support is the 20-day moving average crossing at 4728.52.
INTEREST RATES
INTEREST RATES: March T-bonds were lower overnight and sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low, the June high crossing at 128-16 is the next upside target. Closes below the 20-day moving average crossing at 121-21 would signal that a short-term top has been posted. First resistance is the 87% retracement level of the June-October decline crossing at 125-23. Second resistance is June’s high crossing at 128-16. First support is the 10-day moving average crossing at 124-05. Second support is the 20-day moving average crossing at 121-21.
March T-notes were lower overnight and sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low, the 87% retracement level of the crossing at 113.140 is the next upside target. Closes below the 20-day moving average crossing at 111.220 would signal that a short-term top has been posted. First resistance is Wednesday’s high crossing at 113.120. Second resistance is the 87% retracement level of the crossing at 113.140. First support is the 10-day moving average crossing at 112.219. Second support is the 20-day moving average crossing at 111.220.
ENERGY MARKETS
ENERGIES: February crude oil was lower overnight as it consolidates some of the rally off December’s low. Overnight trading sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI are overbought but are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at $72.60 would signal that a short-term top has been posted. If February extends the rally off December’s low, the 50-day moving average crossing at $76.62 is the next upside target. First resistance is the 50-day moving average crossing at $76.62. Second resistance is the November 30th high crossing at $79.67. First support is the 20-day moving average crossing at $72.60. Second support is December’s low crossing at $67.98.
CURRENCIES
CURRENCIES: The March Dollar was lower overnight as it extends the decline off November’s high. Overnight trading sets the stage for a lower opening when the day session begins trading later this morning. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off November’s high, the 87% retracement level of the July-October rally crossing at $99.783 is the next downside target. Closes above the 20-day moving average crossing at $102.387 would signal that a short-term low has been posted. First resistance is the 10-day moving average crossing at $101.478. Second resistance is the 20-day moving average crossing at $102.387. First support is the 87% retracement level of the July-October rally crossing at $99.783. Second support is July’s low crossing at $98.786.
The March Euro was slightly higher overnight as it tested the 75% retracement level of the July-October decline crossing at 1.11710. Overnight trading sets the stage for a slightly higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the the rally off December’s low, the 87% retracement level of the July-October decline crossing at 1.12734 is the next upside target. Closes below the 20-day moving average crossing at 1.09515 would signal that a short-term top has been posted. First resistance is the 75% retracement level of the July-October decline crossing at 1.11710. Second resistance is the 87% retracement level of the July-October decline crossing at 1.12734. First support is the 10-day moving average crossing at 1.10410. Second support is the 20-day moving average crossing at 1.09515.
GRAINS
Grains: March corn was slightly lower overnight. Overnight trading sets the stage for a slightly lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $4.86 1/2 would signal that a short-term low has been posted. If March renews this month’s decline, psychological support crossing at $4.50 is the next downside target. First resistance is the 50-day moving average crossing at $4.86 1/2. Second resistance is December’s high crossing at $4.93 3/4. First support is this month’s low crossing at $4.68 1/4. Second support is psychological support crossing at $4.50.
March wheat was higher overnight and sets the stage for a higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If March renews the rally off November’s low, the 38% retracement level of the July-November decline crossing at $6.53 is the next upside target. Closes below the 50-day moving average crossing at $6.04 1/2 would open the door for additional weakness near-term. First resistance is the 38% retracement level of the July-November decline crossing at $6.53. Second resistance is the August 23rd high crossing at $6.68 3/4. First support is the 50-day moving average crossing at $6.04 1/2. Second support is November’s low crossing at $5.56 1/4.
March soybeans were slightly lower overnight and sets the stage for a slightly lower opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $13.44 1/4 are needed to signal that a short-term low has been posted. If March renews the decline off the December 12th high, the 50% retracement level of the May-July rally crossing at $12.87 is the next downside target. First resistance is the 50-day moving average crossing at $13.44 1/4. Second resistance is the December 12th high crossing at $13.60. First support is the 50% retracement level of the May-July rally crossing at $12.87. Second support is the October 11th low crossing at $12.82 1/2.
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