Wednesday, January 3–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. indexes are at or near their record highs.
Tensions in Iran are still on the front burner of the market place. Demonstrators in that country are demanding an overthrow of the ruling government. Several protesters have been killed and the situation is not improving, according to reports. This matter is supporting the safe-haven gold and silver markets, as well as the crude oil market.
North Korea is also in the news. The rogue nation made an overture to South Korea for negotiations, but is also maintaining its plans to become a nuclear power. Reports said North Korea could be ready to launch another ballistic missile.
The U.S. economic highlight Wednesday will be the release of the minutes of the last Federal Open Market Committee (FOMC) meeting held on Dec. 12-13. Traders will parse the statement for clues on the direction and timing of U.S. monetary policy in 2018.
The key outside markets on Wednesday morning find the U.S. dollar index higher on a corrective bounce from recent strong selling pressure. Meantime, Nymex crude oil prices are firmer one day after hitting a 2.5-year high above $60.00 a barrel. The Iran demonstrations are supporting the oil market.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, construction spending, the ISM manufacturing report on business, domestic auto industry sales, and the FOMC minutes from the last meeting.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are firmer and poked to another contract and record high overnight. Bulls still have the solid overall near-term technical advantage. There are 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 neutral early today. The 4-day moving average is even with 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 2,710.00 and then at 2,720.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,674.50 and then at last week’s low of 2,667.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are firmer in early U.S. trading and near the recent record high. The bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 contract and record high of 6,545.75 and then at 6,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,500.00 and then at 6,475.00. 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 firmer in early U.S. trading, on short covering from Tuesday’s losses. Bulls and bears are on a level overall near-term technical playing field. 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 to bullish early today. Shorter-term technical resistance is seen at 152 16/32 and then at 153 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 151 12/32 and then at 151 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears still have the solid 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 bullish early today. Shorter-term resistance lies at last week’s high of 124.02.5 and then at 124.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at today’s low of 123.20.5 and then at this week’s low of 123.17.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer on short covering after hitting a 3/5-month low Tuesday. Bears still have the firm near-term technical advantage. The shorter-term moving averages for the dollar index are bearish 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 to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 91.930 and then at 92.375. Shorter-term support is seen at this week’s low of 91.470 and then at 91.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer in early U.S. trading and near Tuesday’s 2.5-year high. Bulls have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $61.00 and then at 62.00. Look for sell stops just below technical support at $60.00 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were firmer overnight. Grain market bears remain in overall near-term technical control. However, the corn and wheat markets are showing early signs that market bottoms are in place.