Tuesday, December 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following a big rebound Monday afternoon from steep losses seen in the morning.
The world marketplace was encouraged that a high-level telephone call took place Monday between trade officials of the U.S. and Chinese government. The two sides have until March 1 to reach a trade deal, or the U.S. has threatened to levy more trade penalties against China.
Brexit turmoil and uncertainty regarding when and how the U.K. will depart the European Union still have European stock and financial markets a bit unsettled. Prime minister Theresa May Monday called off Tuesday’s vote on her Brexit plan, which most reckoned would be voted down anyway. The Euro currency and British pound sunk on the news, and the U.S. dollar index rallied.
Gold prices hit a nearly five-month high overnight, partly on safe-haven demand from Europeans over the Brexit uncertainty, and also on more bullish charts supporting technically based buying interest.
In other overnight news, Indian stock and financial markets gyrated after India’s central bank chief abruptly quit. The Indian rupee dropped sharply on the news.
The key outside markets today find the U.S. dollar index lower on a corrective pullback from solid gains posted Monday. Meantime, Nymex crude oil prices are modestly up after selling pressure seen Monday. There are still no early technical clues the crude oil market is close to a bottom.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the producer price index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading today, on a continuation of the recovery Monday afternoon after the market Monday morning hit a contract low. Bears are still in firm technical command. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,675.00 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,632.25 and then at 2,609.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are higher in early U.S. trading, on a continued corrective bounce from Monday afternoon’s gains. Bears are still in technical control. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 6,800.00 and then at 6,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,680.50 and then at 6,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices were lower overnight on a corrective pullback after hitting a 3.5-month high on Monday. Bulls are still in solid 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 143 23/32 and then at Monday’s high of 143 31/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 30/32 and then at 142 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: The market is lower in early U.S. trading, on a corrective pullback after scoring a contract high on Monday. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 120.24.5 and then at the contract high of 120.30.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.11.5 and then at 120.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is lower in early U.S. trading, on a downside correction from solid gains Monday. Bulls still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day. The 9-day is above 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 Monday’s high of 96.680 and then at the November high of 96.930. Shorter-term support is seen at 96.000 and then at last week’s low of 95.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer in early U.S. trading today. Bears are in firm overall near-term technical control. There are still no early clues that a market bottom is close at hand. 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 Monday’s high of $52.81 and then at $54.00. Look for sell stops just below technical support at $51.00 and then at $50.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were firmer overnight, on short covering. Traders will closely examine this morning’s monthly USDA supply and demand report. The grain market bears have the overall near-term technical advantage, but it does appear corn and soybean prices have put in market bottoms.
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