Tuesday, December 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. For the year 2020 the Nasdaq index will gain around 43%, with the S&P 500 gaining around 15%, after it gained 29% in 2019. These numbers underscore how the stock market has really been the only game in town for most investors the past couple years. Easy money from the major central banks of the world during this time has helped propel the global equities markets. Still, many veteran market watchers that have lived through bear markets in stocks wonder when the present bullish and possibly well over-inflated balloon will finally pop.
The stock markets and investor risk appetite this week got a boost from the surprise weekend move by President Trump to sign a Covid-19 aid package for Americans. Then the U.S. House of Representatives on Monday voted to give Americans $2,000 payments instead of the $600 stipulated in the bill signed by Trump. Trump wants the $2,000 payments. Now, it’s up to the Republican-controlled U.S. Senate to agree to the increase, or defy Trump for the first time.
On Monday Covid-19 hospitalizations in the U.S. hit a new record high as the pandemic is still raging, keeping restrictions on businesses and the public in place and new ones being implemented. At present, traders and investors are preferring to focus on the current, major rollout of a Covid vaccine that is likely to tamp down the virus by summertime.
The U.S. dollar index is lower in early U.S. trading. The other important outside market sees February Nymex crude oil futures prices higher and trading around $48.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently around 0.945%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the weekly chain store sales index and the S&P-Core-Logic home price indexes.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher and hit another record high in early U.S. trading. A near-term price uptrend has been restarted on the daily bar chart. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 3,747.75 and then at 3,775.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,700.00 and then at Monday’s low of 3,676.00. Wyckoff’s Intra-day Market Rating: 7.5
March Nasdaq index futures: Prices are higher and hit another record high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 12,898.75 and then at 13,000.00. On the downside, shorter-term support is seen at the overnight low of 12,841.25 and then at Monday’s low of 12,655.25. Wyckoff’s Intra-Day Market Rating: 7.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 Monday’s high of 172 30/32 and then at 173 14/32. Shorter-term support lies at 172 even and then at last week’s low of 171 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 137.31.5 and then at 138.03.0. Shorter-term technical support lies at last week’s low of 137.20.0 and then at 137.15.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are higher early today. Bulls are in solid technical control. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below 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 the overnight high of 1.2282 and then at the December high of 1.2303. Shorter-term support is seen at the overnight low of 1.2233 and then at 1.2200. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Monday’s high of $48.96 and then at the December high of $49.43. Look for sell stops just below technical support at Monday’s low of $47.50 and then at $47.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed to weaker in early U.S. pre-market trading. The grain markets bulls still have the solid overall near-term technical advantage amid price uptrends in place on the daily charts. Not much new heading into the new year. The supply and demand fundamentals in the grains continue to favor the bulls. Dry weather in South American growing regions is also bullish for corn and soybeans. The corn and soybean markets are still over-extended on a short-term technical basis and are due for normal corrective pullbacks in their uptrends.
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