Friday, December 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. There are now concerns a few Republican U.S. senators are balking at the new tax-reform legislation, after reports earlier this week said a compromise had been reached on the bill. Many market watchers would argue the recent world stock market rallies were based in large part on ideas of lower U.S. corporate taxes. Now with a bit more uncertainty on the eventual U.S. tax-reform bill becoming law, bullish traders and investors are wavering a bit. U.S. stock indexes are pointed toward steady to weaker openings when the New York day session begins.
In overnight news, Russia’s central bank cut its main interest rate by 0.5%. The move boosted the Russian ruble.
In other news, Bank of Canada governor Stephen Poloz on Thursday compared buying bitcoin as an investment vehicle to gambling. One analyst said Poloz’s comments were a direct warning to bitcoin buyers.
The U.S. dollar index is slightly lower in early U.S. trading. The other key “outside market” sees Nymex crude oil futures prices slightly higher.
U.S. economic data due for release Friday includes the Empire State manufacturing survey, industrial production and capacity utilization, and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly up in early U.S. trading. Bulls still have the solid overall near-term technical advantage. There are still no strong, early chart clues to suggest a market top is close at hand. 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 neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,675.50 and then at 2,685.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,651.75 and then at 2,640.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are slightly higher in early U.S. trading. The bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the contract high of 6,446.75 and then at 6,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,400.00 and then at 6,383.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls have the slight overall near-term technical advantage. 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 this week’s high of 154 6/32 and then at the December high of 154 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 26/32 and then at 153 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.17.5 and then at this week’s high of 124.21.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.13.0 and then at 124.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly lower in early U.S. trading. Bears have some downside momentum. The shorter-term moving averages for the dollar index are neutral as the 4-day is below the 9-day. The 9-day is above with the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at 93.350 and then at 93.700. Shorter-term support is seen at this week’s low of 92.860 and then at 92.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly higher in early U.S. trading. Trading has turned choppy this week. Look for buy stops to reside just above technical resistance at $57.83 and then at 58.00. Look for sell stops just below technical support at $57.00 and then at $56.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were slightly higher overnight. Corn and wheat market bears remain in firm technical control. Soybean bears also have downside momentum. Look for continued low daily price volatility for the grain futures into the end of year, with a downside bias.