Wednesday, December 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mostly lower overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins, on tepid corrective bounces following more strong losses on Monday. Markets were closed Tuesday for Christmas. Some European markets remain closed Wednesday for the Christmas holiday season.
There is still some marketplace unease over the U.S. government’s partial shutdown that shows no signs of ending any time soon. President Trump said Tuesday he will keep the government shut until he gets funding for his wall. He also took a press opportunity to again criticize the Federal Reserve for raising interest rates too fast.
The key outside markets today see the U.S. dollar index higher. Meantime, Nymex crude oil prices are higher on short covering after hitting a 17-month low of $42.36 a barrel on Monday.
U.S. economic data due for release Wednesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the Richmond Fed business survey,a nd the S&P Case-Shiller home price index.–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading today after hitting a new low for the year overnight. Bears are in solid technical command and there are no early clues of a market bottom being close at hand. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 2,375.00 and then at 2,400.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight contract low of 2,316.75 and then at 2.300.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index December futures: Prices are firmer in early U.S. trading and hit a new low for the year and contract low overnight. Bears are in solid technical control. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 6,000.00 and then at 6,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight contract low of 5,820.50 and then at 5,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly firmer in early U.S. trading after hitting a contract high overnight. Bulls are in solid near-term technical control. 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 early today. Shorter-term technical resistance is seen at the overnight contract high of 146 3/32 and then at 146 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 10/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher and hit a contract high in early U.S. trading. Bulls have the solid chart advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight contract high of 121.20.5 and then at 121.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.11.0 and then at 121.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The March U.S. dollar index is higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Monday’s high of 96.440 and then at last Friday’s high of 96.560. Shorter-term support is seen at the overnight low of 96.020 and then at last week’s low of 95.630. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer on a corrective bounce after hitting a 17-month low of $42.36 on Monday. Bears are in strong overall near-term technical control. There are still no early clues that a market bottom is close at hand, but there is strong longer-term technical support at the $42.00 area that may stop the bleeding. 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 neutral early today. Look for buy stops to reside just above technical resistance at $44.00 and then at $45.00. Look for sell stops just below technical support at Monday’s low of $42.36 and then at $42.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were closed overnight. The grains are being bearishly impacted by the shaky world stock, financial and currency markets and the U.S.-China trade war. The grain market bears have the overall near-term technical advantage.
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