Wednesday, January 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins.
The key outside markets on Wednesday morning see the U.S. dollar index higher on a corrective bounce after hitting a 3.5-year low earlier this week. The greenback bears still have the solid overall near-term technical advantage, to suggest more pressure in the near term.
Meantime, Nymex crude oil prices are weaker on some more profit taking after hitting a three-year high of $64.89 a barrel on Tuesday. The oil bulls are technically strong to suggest still more gains in the near term.
In overnight news, the Euro zone reported its December consumer price index at up 0.4% from November and up 1.4%, year-on-year. Those numbers were right in line with market expectations.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Goldman Sachs and Johnson Redbook retail sales reports, industrial production and capacity utilization, the NAHB housing index, Treasury international capital data and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are 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 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 early today. Today, shorter-term technical resistance comes in at the contract and record high of 2,808.50 and then at 2,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,769.25 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are 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 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 early today. Shorter-term technical resistance is seen at the contract high of 6,845.75 and then at 6,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,729.25 and then at 6,700.00. 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. Bears have the firm 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 151 2/32 and then at 151 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 150 10/32 and then at 150 even. 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 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 resistance lies at the overnight high of 123.02.0 and then at this week’s high of 123.05.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 122.20.0 and then at 122.16.0. 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 higher on a short-covering bounce after hitting a 3.5-year low overnight. 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 to bullish early today. The dollar index finds shorter-term technical resistance at last Friday’s high of 90.735 and then at 91.000. Shorter-term support is seen at the overnight low of 89.960 and then at 89.750. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are weaker in early U.S. trading, on a corrective, profit-taking pullback after hitting a three-year high on Tuesday. Bulls still have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction. Look for buy stops to reside just above technical resistance at $64.00 and then at Tuesday’s high of $64.89. Look for sell stops just below technical support at $63.00 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were narrowly mixed overnight. Grain market bears remain in overall near-term technical control. However, recent gains in soybeans hint that a market bottom is in place. Corn and wheat futures continue to languish not far above their recent lows, to suggest some more downside pressure for those markets.