Wednesday, December 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
While world stock markets were mostly lower overnight, U.S. stock indexes are pointed to weaker openings when the New York day session begins. Asian stock indexes led the declines, amid worries about China’s economic growth prospects. A big drop in copper prices this week has also spooked equity market traders.
It’s a bit of a “risk-off” trader/investor mentality in the marketplace at mid-week. Safe-haven gold and U.S. Treasury prices are trading up as the world equity markets are under selling pressure.
The key “outside markets” Wednesday morning see the U.S. dollar index slightly lower. Nymex crude oil futures prices are also weaker early today.
The economic report highlight of the trading week will be Friday morning’s November U.S. employment report from the Labor Department. The key non-farm payrolls number is forecast to be up 195,000.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, revised productivity and costs, the IDB/TIPP economic optimism index, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on more profit-taking after hitting a contract and record high on Monday. Bulls still 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,634.00 and then at 2,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,615.00 and then at 2,606.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are lower in early U.S. trading. The bulls still have the overall near-term technical advantage. However, the recent higher volatility at higher price levels is a warning signal of a topping process. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,297.00 and then at 6,325.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,250.00 and then at 6,225.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are higher and hit a nearly three-month high in early U.S. trading. Bulls have gained the overall near-term technical advantage with this week’s gains. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 154 9/32 and then at 155 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 17/32 and then at 153 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading, on more short covering. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 124.18.0 and then at 124.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.09.5 and then at 124.02.5. 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 near steady 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 above the 9-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 last week’s high of 93.130 and then at 93.500. Shorter-term support is seen at the overnight low of 92.82 and then at 92.50. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
January Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage, but the price uptrend has stalled. Look for buy stops to reside just above technical resistance at Tuesday’s high of $57.92 and then at this week’s high of 58.34. Look for sell stops just below technical support at last week’s low of $56.75 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were mixed to firmer overnight. Corn and wheat markets remain bearish. Soybean bulls have upside momentum. It’s still my bias that the corn and wheat markets have put in major bottoms.