Tuesday, December 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward steady to firmer openings when the New York day session begins. There continues to be a general “risk-on” trading attitude in the world marketplace that is boosting equity markets.
The NFIB U.S. small business index was released early this morning and was at a record high for small business optimism.
This is a big week for economic events, as monetary policy meetings of the U.S. Federal Reserve, the European Central Bank and Bank of England take place this week. It’s widely expected the Fed will raise interest rates at the conclusion of its FOMC meeting Wednesday afternoon. Fed chair Janet Yellen will hold what will likely be her final press conference after the FOMC statement.
ECB President Mario Draghi is set to deliver a speech Tuesday, which will be closely monitored for any comments he makes on future ECB monetary policy.
The key “outside markets” Tuesday morning see the U.S. dollar index near steady. Meantime, Nymex crude oil futures prices are higher as bulls are regaining upside technical momentum early this week.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, 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 firmer in early U.S. trading and are at a record high. Bulls 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 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 2,667.75 and then at 2,675.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,652.25 and then at 2,640.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are slightly lower 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 6,427.75 and then at the contract high of 6,446.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,400.00 and then at Monday’s low of 6,359.00. 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 slightly lower in early U.S. trading. Bulls still have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 153 6/32 and then at Monday’s high of 153 19/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 152 28/32 and then at 152 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bears still have the 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 Monday’s high of 124.17.5 and then at 124.23.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.05.0 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady in early U.S. trading. The shorter-term moving averages for the dollar index are bullish as the 4-day is above the 9-day and 18-day. The 9-day is above with 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 last week’s high of 93.700 and then at 94.000. Shorter-term support is seen at Monday’s low of 93.245 and then at 93.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
January Nymex crude oil prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage and have regained upside momentum early this week. Look for buy stops to reside just above technical resistance at the November high of $59.05 and then at 60.00. Look for sell stops just below technical support at Monday’s low of $57.90 and then at $57.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures markets were mixed overnight. Corn and wheat market bears remain in firm technical control. Soybean bulls have also lost their slight chart edge. Traders will closely examine this morning’s monthly USDA supply and demand report.