* Latest Market Developments *
Markets were mostly quiet in overnight dealings, on the day after the Christmas holiday. There were no major, markets-moving news events over the Christmas holiday. Trading volumes in many U.S. markets on Friday could be the lightest of the year, especially since there are no major U.S. economic reports due for release.
The feature in overnight trading was a jump in gold prices, which was mostly due to short covering in the futures market and some year-end bargain hunting.
The key “outside markets” saw crude oil prices slightly higher and the U.S. dollar index trade near steady in early trading. U.S. stock indexes were pointed toward firmer openings Friday.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risk assessment is low 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 this week’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 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 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 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 this week’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: 6.0
Dow futures: Prices are firmer in early U.S. trading as prices hover near this week’s record high. The bulls have upside momentum. Buy stops likely reside just above technical resistance at the record high of 18,025 and then at 18,050. Sell stops likely reside just below technical support at Wednesday’s low of 17,980 and then at 17,950. 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 neutral to bullish early today. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are firmer 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 early today. Shorter-term technical resistance is seen at the overnight high of 143 15/32 and then at 143 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at 143 even and then at 142 21/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 March U.S. T-Notes: Prices are slightly higher 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 Wednesday’s 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 this week’s low of 125.21.0 and then at the December low of 125.17.5. 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 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 90.250 and then at Tuesday’s contract high of 90.405. Shorter-term support is seen at the overnight low of 90.070 and then at 90.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly higher 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. The recent sideways pause in price action favors the bears. Look for buy stops to reside just above technical resistance at Wednesday’s high of $57.15 and then at $58.00. Look for sell stops just below technical support at the overnight low of $55.68 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were closed in overnight trading. 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. I also would not be surprised to see some fresh speculative money flow into the grains on the long side of the markets at the start of the new year.
