Tuesday, January 16–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight, boosted by increasing optimism on global economic growth. Along with that specter come tighter monetary policies from the world’s major central banks. U.S. stock indexes are pointed toward solidly higher openings and new record highs when the New York day session begins.
Gold prices are firmer and hit a four-month high overnight, while Bitcoin prices are plunging again early this week and hit a four-week low overnight.
The key outside markets on Tuesday morning see the U.S. dollar index lower and not far above last Friday’s 3.5-year low. The greenback bears 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 mild profit taking after hitting a three-year high of $64.89 a barrel overnight. The recent rally in oil prices has been a positive development for the raw commodity sector.
U.S. data due for release Tuesday is light and includes the Empire State Manufacturing Survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are higher and hit another record high 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight contract and record high of 2,803.50 and then at 2,815.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,789.75 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index December futures: Prices are solidly higher and hit another new record high 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 bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 6,819.25 and then at 6,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,773.00 and then at 6,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering. Bears still 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 151 1/32 and then at 151 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 150 10/32 and then at 150 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering after hitting a contract low last Friday. Bears still 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 bullish early today. Shorter-term resistance lies at 123.08.0 and then at 123.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.28.0 and then at the contract low of 122.20.0. 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 lower in early U.S. trading, after hitting a 3.5-year low on Monday. Bears 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 bearish 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 90.150 and then at this week’s low of 90.045. Wyckoff’s Intra Day Market Rating: 4.0
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 overnight. 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 the overnight high of $64.89 and then at $65.00. 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 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.