Monday, December 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed solidly higher openings when the New York day session begins. Major U.S. stock indexes are at or near record highs.
Risk appetite is keener to start the trading week after the U.S. Senate very early Saturday morning passed a tax-reform bill, which many believe will free up the U.S. economy for stronger growth in the coming months and years. Now, the House of Representatives and Senate must hammer out a final tax bill.
The risk-on trading mentality in the marketplace is bearish for safe-haven assets like gold and U.S. Treasuries.
The political furor over President Trump and his potential collusion with the Russians on the last presidential election campaign, including new weekend developments, has so far not had much impact on the markets Monday morning. An erroneous news report on ABC Friday, regarding Trump’s involvement, hit the stock and financial markets hard, but they quickly recovered.
In overnight news, the Euro zone producer price index for October was reported up 0.4% from September and up 2.5%, year-on-year. Those numbers were about in line with market expectations.
The U.S. dollar index is higher in early U.S. trading, boosted in part on the passage of the tax measure by the Senate.
Nymex crude oil futures prices are weaker today. Oil bulls still have the firm overall near-term technical advantage as prices are not that far below the recent two-year high.
U.S. economic data due for release Monday includes the ISM New York report on business, and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are solidly higher in early U.S. trading and hit another contract and record high. Bulls have the solid overall near-term technical advantage. There are no 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,675.00 and then at 2,685.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,655.50 and then at 2,640.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 7.0
March Nasdaq index December futures: Prices are 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 below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,418.50 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 6,371.75 and then at 6,350.00. 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 lower in early U.S. trading. Trading has been choppy recently. 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 152 26/32 and then at 153 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 2/32 and then at Friday’s low of 151 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are 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 and 18-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 124.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.00.0 and then at last week’s low of 123.29.5. 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 in early U.S. trading. Bears still have the slight overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral as the 4-day is even with 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 last week’s high of 93.130 and then at 93.500. Shorter-term support is seen at 92.50 and then at 92.265. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $58.34 and then at the November high of 59.05. Look for sell stops just below technical support at Friday’s low of $57.29 and then at last week’s low of $56.75. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were higher overnight, on short covering. Corn and wheat markets are still bearish. Soybean bulls still have some momentum. Rallies in world stock markets have given the grain market bulls some fresh power, on notions of better world demand for grains.