Tuesday, January 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
The U.S. government reopened Tuesday after a three-day shutdown. U.S. lawmakers finally agreed on a temporary budget plan. That situation did not have a major impact on the world marketplace, but world equity markets were mostly higher Tuesday, partly on relief the U.S. government was open for business. U.S. stock indexes were set to open narrowly mixed when the New York day session begins.
Focus of the marketplace this week is on Davos, Switzerland and its World Economic Forum that began Tuesday. World government officials, corporate heads and other celebrities and bigshots will be at the yearly event to discuss economics and ways to make the world a better place. The highlight of the event will be a speech by U.S. President Trump.
In overnight news, the International Monetary Fund upped its world economic growth forecast to 3.9% in 2018. That’s up 0.2% from its previous estimate.
The Bank of Japan said Tuesday it has no plans to exit anytime soon its easy-money polices. That news boosted the Japanese yen.
The key outside markets on Tuesday morning see the U.S. dollar index slightly higher. Prices are hovering near last week’s 3.5-year low. Meantime, Nymex crude oil prices are also slightly higher and not far below last week’s more-than-three-year high.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are weaker in early U.S. trading and did poke to another contract and record high overnight. Bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract and record high of 2,842.00 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,815.00 and then at Monday’s low of 2,802.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index December futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract and record high overnight. The bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction soon. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight contract high of 6,958.00 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,900.00 and then at 6,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are higher on more short covering after hitting a contract low Monday. 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 technical resistance is seen at the overnight high of 149 17/32 and then at 150 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 148 25/32 and then at the contract low of 148 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher on short covering after hitting a contract low Monday. 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 122.16.0 and then at 122.19.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 122.01.5 and then at 122.00.0. 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 slightly higher in early U.S. trading. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-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 90.500 and then at last week’s high of 90.765. Shorter-term support is seen at last week’s low of 89.960 and then at 89.750. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
March Nymex crude oil prices are slightly higher in early U.S. trading. Prices hit a more-than-three-year high last week. Bulls have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at Monday’s high of $64.13 and then at last week’s high of $64.89. Look for sell stops just below technical support at $63.00 and then at last week’s low of $62.78. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were narrowly mixed overnight. Recent gains in soybeans and corn hint that market bottoms are in place. Wheat futures continue to languish not far above their recent lows.