Monday, December 15–Jim Wyckoff’s Morning Web Log

OVERNIGHT DEVELOPMENTS

World stock market prices were mostly higher Monday on
corrective bounces from last week’s selling pressure. The
plunging price of crude oil the past few weeks has spooked
the stock markets, despite the benefit for consumers at the
gasoline pumps. Overnight, January Nymex crude dropped to
another five-year low of $56.25 a barrel but then posted a
corrective bounce. Some fresh violence in oil-exporter Libya
is limiting selling interest in oil to start the trading
week.

The U.S. dollar index is firmer Monday and hovering not far
below its recent four-year high. The stronger greenback the
past few months has been a bearish underlying factor for the
raw commodity sector.

Japanese Prime Minister Shinzo Abe saw an election victory
on Sunday, which was not unexpected. After his victory, Abe
said he would continue on his path to boost the presently
moribund Japanese economy.

The market place is keeping a close eye on the terrorist
hostage situation in Sydney, Australia. The gunman holding
hostages at a café could have ISIS terrorist links.

Traders and investors are looking ahead to this week’s
Federal Reserve Open Market Committee (FOMC) meeting to
discuss U.S. monetary policy. Many believe the Fed meeting
will slightly change statement wording to favor the monetary
policy hawks. The FOMC could also further elaborate on a
timeline for raising interest rates. The Fed has not raised
interest rates in six years.

U.S. economic data due for release Monday includes
industrial production and capacity utilization, the Empire
State manufacturing survey, Treasury international capital
data, and the NAHB housing market index.

(Note: Follow me on Twitter–@jimwyckoff–for breaking
market news.)

Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risks are
mostly on the back burner of the market place…for now.
However, the falling price of oil and wobbly world stock
markets have traders and investors a bit nervous.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge
investor risk appetite in the world market place each day.
Each day I assess the “risk-on” or “risk-off” trader
mentality in the market place with a numerical reading of 1
to 10, with 1 being least risk-averse (most risk-on) and 10
being the most risk-averse (risk-off), and 5 being neutral.

–Jim
 
U.S. STOCK INDEXES

S&P 500 March e-mini futures: Prices are higher in early
trading, on a corrective bounce after hitting a six-week low
overnight. Bulls have faded recently, to begin to suggest at
least a near-term market top is in place. The shorter-term
moving averages (4-, 9- and 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. Short-term
oscillators (RSI, slow stochastics) are neutral to bullish
early today. Today, shorter-term technical resistance comes
in at Friday’s high of 2,025.50 and then at 2,041.25. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at the overnight
low of 1,987.75 and then at 1,975.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 6.0

Nasdaq index futures: Prices are solidly higher in early
trading. Shorter-term moving averages (4- 9-and 18-day) are
bearish early today. The 4-day moving average is below the
9-day and 18-day. The 9-day average is below the 18-day.
Short-term oscillators (RSI, slow stochastics) are neutral
to bullish early today. Shorter-term technical resistance is
seen at 4,230.00 and then at Friday’s high of 4,250.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at 4,200.00 and then at
Friday’s low of 4,182.00. Sell stops are likely located just
below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher in early U.S. trading on a
corrective bounce from last week’s shellacking. Prices
Friday hit a six-week low. Bulls have faded badly to suggest
a market top is in place. Buy stops likely reside just above
technical resistance at 17,350 and then at 17,400. Sell
stops likely reside just below technical support at 17,250
and then at 17,200. Shorter-term moving averages are bearish
early today, as the 4-day moving average is below the 9-day
and 18-day. The 9-day moving average is below the 18-day
moving average. Shorter-term oscillators (RSI, slow
stochastics) are bearish early today. Wyckoff’s Intra-Day
Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today on profit
taking after hitting a two-month high overnight. Bulls still
have the overall near-term technical advantage amid flight-
to-quality buying. 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 bearish
early today. Shorter-term technical resistance is seen at
the overnight high of 145 24/32 and then at 146 even. Buy
stops likely reside just above those levels. Shorter-term
support lies at the overnight low of 144 25/32 and then at
144 16/32. 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 trading, on
profit taking after hitting a six-week high overnight.
Bulls still 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.
The 9-day is above the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral to bearish early today.
Shorter-term resistance lies at 127.13.5 and then at
127.24.0. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
127.07.0 and then at 127.00.0. 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 firmer in early trading.
Bulls still have the firm overall near-term technical
advantage but trading has turned choppy recently. Short-term
oscillators for the dollar index are neutral early today.
The dollar index finds shorter-term technical resistance at
the Friday’s high of 88.905 and then at 89.050. Shorter-term
support is seen at the overnight low of 88.350 and then at
last week’s low of 88.195. Wyckoff’s Intra Day Market
Rating: 6.0

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly higher in early
U.S. trading and hit another five-year low of $56.25
overnight. Bears remain in strong overall near-term
technical control. Look for buy stops to reside just above
technical resistance at the overnight high of $58.73 and
then at $59.00. Look for sell stops just below technical
support at Friday’s low of $57.34 and then at $57.00.
Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Grain futures markets were higher in overnight trading.
Bulls saw a good day last Friday and there are now near-term
price uptrends in all three markets. Bulls have upside
momentum heading into the new weeks and heading into the end
of the year.