World Stock Markets On a Roll; U.S. Jobs Report on Deck Friday AM

Friday, January 5–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight, boosted by the rally in the U.S. stock market Thursday that saw the iconic Dow Jones Industrial Average hit 25,000 for the first time ever. U.S. stock indexes are pointed toward higher openings, and at new record highs, when the New York day session begins.

Traders and investors are awaiting Friday morning’s U.S. employment report from the Labor Department. This report is arguably the most important U.S. data point of the month. The key December non-farm payrolls number is forecast to come in at up 180,000. However, the stronger-than-expected jobs-growth reading in Thursday’s ADP national employment report (up 250,000) makes many suspect today’s jobs report will come in with a higher non-farm jobs number than ealier forecast.

In overnight news, the Euro zone consumer inflation rate was reported at up 1.4% in December, year-on-year. That was down 0.1% from the November reading. Meantime, November producer prices were reported up 2.4%, year-on-year. The European Central Bank wants the Euro zone inflation rate to be closer to 2.0%.

The key outside markets on Friday morning find the U.S. dollar index higher on a corrective bounce in a downtrend. Meantime, Nymex crude oil prices are weaker on a corrective pullback from recent solid gains.

Other U.S. economic data due for release Friday includes the international trade in goods and services report, manufacturers’ shipments and inventories, and the non-ISM manufacturing report on business.

–Jim

U.S. STOCK INDEXES

March S&P 500 December e-mini futures: Prices are firmer and scored another contract and record high overnight. 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 bullish early today. Today, shorter-term technical resistance comes in at 2,740.00 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,723.75 and then at Thursday’s low of 2,708.50. 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 and hit another 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. 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 6,650.00 and then at 6,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,599.75 and then at 6,580.00. 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 weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field, amid recent choppy trading. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 152 11/32 and then at this week’s high of 152 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at Wednesday’s low of 151 19/32 and then at this week’s low of 151 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

March U.S. T-Notes: Prices are weaker in early U.S. trading. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 123.21.0 and then at 123.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 123.12.5 and then at 123.08.0. 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 firmer in early U.S. trading. Bears still have the firm near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 92.000 and then at 92.375. Shorter-term support is seen at this week’s low of 91.470 and then at 91.250. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

February Nymex crude oil prices are weaker on a corrective pullback from recent good gains. Prices Thursday hit a three-year high. Bulls still have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at this week’s high of $62.21 and then at 63.00. Look for sell stops just below technical support at $61.00 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Grain futures were narrowly mixed overnight. Not much new this week. Grain market bears remain in overall near-term technical control. However, the corn and wheat markets are showing early signs that market bottoms are in place.