Thursday, December 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight in quieter, pre-holiday trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. tax-reform bill has become law. Lower U.S. tax rates coming in 2018 have bolstered already upbeat attitudes among traders and investors worldwide.
It’s a busy day Thursday for U.S. economic data. The big report of the week for the U.S. is this morning’s third-quarter revised GDP report. GDP is expected to be up 3.3%, year-on-year.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the Philadelphia Fed business survey, revised corporate profits, the monthly house price index, and leading economic indicators.
A feature in the marketplace this week is the big drop in U.S. Treasury prices, amid very little risk aversion in the markets and generally upbeat U.S. and world economic data.
Look for trading activity in most markets to dwindle today and Friday, ahead of the three-day Christmas holiday weekend.
The key outside markets on Thursday morning find the U.S. dollar index firmer and Nymex crude oil prices slightly lower.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are firmer and not far below this week’s contract and record high. Bulls have the solid overall near-term technical advantage. There are still 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 2,698.00 and then at 2,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,679.00 and then at 2,665.00. 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 and not far below this week’s contract and record high. The bulls have the solid overall near-term technical advantage. 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 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 6,545.75 and then at 6,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,463.25 and then at 6,446.50. 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 slightly higher in early U.S. trading. After big down days on Tuesday and Wednesday, 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 and 18-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 150 30/32 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 14/32 and then at 150 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering after dropping to a contract low on Wednesday. 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 Wednesday’s high of 123.26.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Wednesday’s contract low of 123.13.5 and then at 123.08.0. 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 firmer in early U.S. trading. Trading has turned choppy and sideways. The shorter-term moving averages for the dollar index are neutral as the 4-day is below the 9-day and 18-day. The 9-day is above 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 93.310 and then at this week’s high of 93.555. Shorter-term support is seen at this week’s low of 92.750 and then at 92.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $58.60 and then at the November high of 58.99. Look for sell stops just below technical support at this week’s low of $56.88 and then at $56.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were narrowly mixed overnight. Traders will closely examine today’s weekly USDA export sales report. Grain market bears remain in technical control. Look for continued low daily price volatility for the grain futures into the end of year, with a downside bias.