*OVERNIGHT DEVELOPMENTS*
(Note: I want to take this opportunity to wish all of my valued readers Happy Holidays. I have a great job, being able to provide you with my daily perspective on the markets. Thanks for your loyalty.—Jim)
Markets were generally quiet overnight on this Christmas Eve day. U.S. markets close early today and many traders and investors have already checked out for the week, if not for the rest of the year.
The buzz in the market place at present is the dramatic rebound in the U.S. stock indexes the past week. The indexes were left for dead last week, but have come roaring back to establish record highs in the Dow (above 18,000) and S&P stock indexes. The big money flows back into the stock markets worldwide have dented many raw commodity markets, including gold and silver.
Market watchers are also discussing Tuesday’s big third-quarter GDP growth number, at up 5.0%, which is the strongest economic growth in a decade. The report falls squarely into the camp of U.S. monetary policy hawks.
Crude oil prices are lower Wednesday. The bears are in firm command as prices hover near a five-year low. The other key “outside market” finds the U.S. dollar index weaker on mild profit taking after hitting a four-year high Tuesday. The stronger greenback recently has also been a significant bearish weight on raw commodity markets.
The Russian ruble has stabilized this week, following last week’s serious erosion against the U.S. dollar and other major currencies. Reports Tuesday said the Russian central bank sold $420 million of its foreign currency reserves last week to support the beleaguered ruble. Reports today said a major credit ratings agency is considering downgrading Russia’s credit rating to junk status.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, weekly jobless claims and the weekly DOE liquid energy stocks report.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risk assessment has faded a bit, but risks have not evaporated.)
(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 Wyckoff
U.S. STOCK INDEXES
S&P 500 March e-mini futures: Prices are slightly higher and hovering near Tuesday’s record high in early trading. Bulls have the solid near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s record high of 2,084.50 and then at 2,100.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 2,071.50 and then at this week’s low of 2,064.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are slightly higher in early trading as the bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 4,300.00 and then at Tuesday’s high of 4,311.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 4,276.00 and then at 4,258.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are firmer in early U.S. trading as prices hover just below Tuesday’s record high. The bulls have good upside momentum. Buy stops likely reside just above technical resistance at the record high of 18,020 and then at 18,050. Sell stops likely reside just below technical support at Tuesday’s low of 17,960 and then at 17,900. Shorter-term moving averages are neutral early today, as the 4-day moving average is above 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly lower early today. Bulls have faded but still have the slight overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 technical resistance is seen at the overnight high of 143 7/32 and then at 143 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Tuesday’s low of 142 21/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 March U.S. T-Notes: Prices are slightly lower in early trading. Bulls have lost their overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 the overnight high of 126.06.0 and then at 126.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s low of 125.29.0 and then at 125.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is weaker in early trading on profit taking after hitting a contract and four-year high on Tuesday. Bulls still have the solid overall near-term technical advantage. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 90.315 and then at Tuesday’s contract high of 90.405. Shorter-term support is seen at 90.000 and then at Tuesday’s low of 89.845. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
February Nymex crude oil prices are lower in early U.S. trading. Prices are not far above last week’s five-year low. Bears remain in solid overall near-term technical control amid still no early clues of a market bottom being close at hand. A bearish symmetrical triangle pattern has formed on the daily bar chart. Look for buy stops to reside just above technical resistance at the overnight high of $57.15 and then at $58.00. Look for sell stops just below technical support at $55.00 and then at $54.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures markets were mixed in overnight trading. Wheat was firmer and corn and soybeans slightly lower. Wheat continues to be the upside leader. Corn and wheat market bulls still have some upside near-term technical momentum heading into the end of the year, but soybeans are seeing choppy and sideways trading. Unless soybean prices perk up soon, I cannot see wheat and corn futures sustaining their uptrends.
