Thursday, January 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight, as a rout in world government bond markets stabilized Thursday. The Chinese government reportedly denied reports out Wednesday that it would scale back its purchases of U.S. Treasury securities. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In other overnight news, there were reports Chinese Premier Li Keqiang said the Chinese economy grew by 6.9% in 2017.
The key outside markets on Thursday morning see the U.S. dollar index firmer. The greenback bears still have the overall near-term technical advantage.
Meantime, Nymex crude oil prices are higher and hit another three-year high of $64.08 a barrel overnight. The U.S. government is expected to rule on Friday whether it extends or waives economic sanctions against Iran. The recent rally in oil prices has been a positive development for the raw commodity sector.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the producer price index, and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for more of a downside correction. 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 and record high of 2,760.00 and then at 2,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,736.50 and then at 2,723.75. 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 solid overall near-term technical advantage. However, the market is still short-term overbought and due for more of a downside correction. 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 neutral early today. Shorter-term technical resistance is seen at the contract high of 6,707.25 and then at 6,725.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,628.25 and then at 6,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly higher on tepid short covering after hitting a contract low Wednesday. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 150 15/32 and then at 151 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 149 27/32 and then at the contract low of 140 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are firmer on short covering after hitting a contract low on Wednesday. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 resistance lies at 123.08.0 and then at 123.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 122.30.5 and then at the contract low of 122.22.5. 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 modestly higher in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 92.360 and then at 92.500. Shorter-term support is seen at the overnight low of 92.015 and then at this week’s low of 91.650. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are higher in early U.S. trading and hit another three-year high. Bulls have the solid overall near-term technical advantage. However, the market is now short-term overbought and due for a decent downside correction soon. Look for buy stops to reside just above technical resistance at $64.50 and then at 65.00. Look for sell stops just below technical support at the overnight low of $63.43 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed overnight. Grain market bears remain in firm overall near-term technical control. Traders are looking ahead to Friday’s USDA quarterly grain stocks and supply and demand report.