Monday, December 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings and at record highs when the New York day session begins. There is growing optimism in the world marketplace that the U.S. Congress will soon pass tax-reform legislation that would likely to spur better U.S. economic growth.
The CME Group on Sunday launched its bitcoin futures contract, which is expected to generate much more trading volume than the Cboe futures contract that began trading last week. Early CME futures trading saw bitcoin prices push above $20,000 before backing off.
In other overnight news, the Euro zone November consumer price index was reported up 0.1% from October and up 1.5%, year-on-year. Those numbers were right in line with market expectations.
The U.S. dollar index is lower in early U.S. trading. The other key “outside market” sees Nymex crude oil futures prices higher.
U.S. economic data due for release Monday is light and includes the NAHB housing market index.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are higher and hit a contract and record high in early U.S. trading. 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 bullish early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,682.50 and then at 2,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index December futures: Prices are higher and hit a contract and record high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at 6,550.00 and then at 6,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,497.50 and then at 6,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 154 8/32 and then at the December high of 154 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 153 22/32 and then at 153 4/32. 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 have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 124.13.0 and then at Friday’s high of 124.17.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.04.0 and then at 124.00.0. 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 lower 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. The 9-day is above with the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.555 and then at the December high of 93.825. Shorter-term support is seen at last week’s low of 92.860 and then at 92.500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $57.83 and then at 58.00. Look for sell stops just below technical support at $57.00 and then at $56.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were slightly higher overnight. Corn and wheat market bears remain in firm technical control, with soybean bears also having the slight chart advantage. Look for continued low daily price volatility for the grain futures into the end of year, with a downside bias. On tap today is the weekly USDA export inspections report.