Wednesday, December 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were steady to mixed in subdued trading overnight, ahead of the U.S. Federal Reserve’s FOMC meeting conclusion this afternoon. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
It’s widely expected the Fed will raise U.S. interest rates by 0.25% this afternoon. Fed chair Janet Yellen will also hold what will likely be her final press conference after the FOMC statement. The marketplace will closely examine the Fed’s economic projections for next year, in trying to anticipate the central bank’s monetary policy moves in 2018.
The European Central Bank and Bank of England monetary policy meetings also take place later this week.
The world markets are not showing a significant reaction to the overnight news that a Democrat won the Alabama Senate seat. Reports said the U.S. dollar index did sell off on the news, but then recovered to trade just slightly lower. Even with the addition of a Democratic senator, it is still expected by most that the U.S. tax reform legislation working its way through the House and Senate will become law.
The other key “outside market” Wednesday morning sees Nymex crude oil futures prices firmer. Oil bulls have the overall near-term technical advantage, but there are stiff chart resistance levels just above the market.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the consumer price index, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are steady in early U.S. trading and just below Tuesday’s 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 early today. Today, shorter-term technical resistance comes in at the contract high of 2,673.00 and then at 2,685.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’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: 5.5
March Nasdaq index December futures: Prices are slightly higher 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 to bullish early today. Shorter-term technical resistance is seen at this week’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 the overnight low of 6,383.00 and then at this week’s low of 6,359.00. 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 near steady in early U.S. trading. 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 below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 153 4/32 and then at this week’s high of 153 19/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 12/32 and then at this week’s low of 152 5/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Bears 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 bearish early today. Shorter-term resistance lies at the overnight high of 124.07.5 and then at this week’s high of 124.17.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.29.5 and then at the October low of 123.27.0. 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 slightly lower 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 this week’s high of 93.825 and then at 94.000. Shorter-term support is seen at this week’s low of 93.245 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $58.00 and then at this week’s high of 58.56. Look for sell stops just below technical support at this week’s low of $56.85 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight, on tepid short covering. Corn and wheat market bears remain in firm technical control. Soybean bulls have also lost their chart edge.