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

OVERNIGHT/EARLY MORNING DEVELOPMENTS

 

The market features in overnight/early morning trading today are solidly higher crude oil prices and a lower U.S. dollar.

JIM’S MARKET THOUGHT OF THE DAY *

Amid a rebound in the crude oil market and a recent significant weakening in the value of the U.S. dollar, many commodity futures markets have posted solid price gains. If the crude oil market has put in a major bottom and the U.S. dollar has put in a major top, then that is very bullish for the commodity markets. However, if that’s not the case–meaning crude oil still has a bit more downside and the U.S. dollar posts a strong rebound, then commodity market traders are presently just seeing a “sucker’s rally.” This week will be extra important in determining which of the above scenarios is correct.–Jim

U.S. STOCK INDEXES

The U.S. stock indexes are mostly weaker in early morning trading today. The big Madoff scandal appears to be having little impact on the overall market today.

March S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day, but has turned down. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical support comes in at the overnight low of 876.40 and then at 867.50. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at the overnight high of 893.00 and then at 900.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 4.5

Today’s key near-term Fibonacci support/resistance level: 849.00.

PIVOT POINT LEVELS FOR MARCH S&P 500:

Pivot:————- 866.85

1st Support:——– 847.20

2nd Support:——– 808.95

1st Resistance:—– 905.10

2nd Resistance:—– 924.75

March Nasdaq Index: The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day, but is turning down. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical support is located at the overnight low of 1,204.00. Sell stops likely reside just below that level, and then more sell stops are likely located just below technical support at 1,176.00. On the upside, short-term resistance is seen at the overnight high of 1,224.00 and then at last week’s high of 1,254.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Today’s key near-term Fibonacci support/resistance level: 1,173.00

PIVOT POINT LEVELS FOR MARCH NASDAQ:

Pivot:———— 1,189.40

1st Support:—— 1,163.85

2nd Support:—— 1,112.70

1st Resistance:— 1,240.60

2nd Resistance:— 1,266.20

March Dow: Sell stops likely reside just below support at 8,600 and then more stops just below support at 8,550. Buy stops likely reside just above shorter-term technical resistance at 8,700 and then just above resistance at 8,750. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day, but is turning down. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 4.5

Today’s key near-term Fibonacci support/resistance level: 8,436

PIVOT POINT LEVELS FOR MARCH DOW:

Pivot:———— 8,570

1st Support:—— 8,449

2nd Support:—— 8,210

1st Resistance:— 8,809

2nd Resistance:— 8,930

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes futures are weaker in early trading today, on profit-taking pressure from recent gains. Bulls still have the near-term technical advantage.

March U.S. T-Bonds: 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 support lies at the overnight low of 134 8/32 and then at 134 even. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 134 29/32 and then at 135 even. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Today’s key near-term Fibonacci support/resistance level: 134 8/32

PIVOT POINT LEVELS FOR MARCH U.S. T-BONDS:

Pivot:———– 134 10/32

1st Support:—– 132 25/32

2nd Support:—– 130 24/32

1st Resistance:– 136 11/32

2nd Resistance:– 137 28/32

March U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Buy stops likely reside just above shorter-term technical resistance at 124.16.0 and then at this 124.24.0. Shorter-term moving averages are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Sell stop orders are likely located just below support at the overnight low of 124.01.0 and then at 123.24.0. Wyckoff’s Intra Day Market Rating: 5.0

Today’s key near-term Fibonacci support/resistance level: 124.01.0

PIVOT POINT LEVELS FOR MARCH U.S. T-NOTES:

Pivot:———– 124 6/32

1st Support:—– 122 30/32

2nd Support:—– 121 18/32

1st Resistance:– 125 18/32

2nd Resistance:– 126 26/32

CURRENCIES

The March U.S. dollar index is lower in early trading today. Prices hit a fresh seven-week low overnight and the bulls are in trouble. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 84.00 and then at the overnight high of 84.28. Shorter-term support is seen at 83.50 and then at 83.25. Today’s key near-term Fibonacci support/resistance level: 82.97. Wyckoff’s Intra Day Market Rating: 3.5

The December Euro is higher in early electronic trading and hit a fresh eight-week high overnight. Euro finds sell stop orders are likely located just below technical support at 1.3400 and then at the overnight low of 1.3335. Shorter-term technical resistance for the Euro is seen at the overnight high of 1.3485 and then at 1.3500. Buy stops likely reside just above those levels. Slow stochastics for the Euro are bullish early today. Today’s key near-term Fibonacci support/resistance level: 1.3570. Wyckoff’s Intra Day Market Rating: 7.5

GOLD

Gold is higher in early dealings today, amid the weaker U.S. dollar and higher crude prices. For February gold, shorter-term technical resistance is seen at last week’s high of $835.30 and then at $840.00. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $824.00 and then at $820.00. Today’s key near-term Fibonacci support/resistance level: $844.00. Wyckoff’s Intra-Day Market Rating: 6.0

CRUDE OIL

Crude oil prices are solidly higher early today. Bulls are gaining some near-term upside technical momentum. In January crude, look for buy stops to reside just above resistance at last week’s high of $49.120 and then just above resistance at $50.00. Look for sell stops just below technical support at $47.50 and then more sell stops just below support at $47.00. Today’s key near-term Fibonacci support/resistance level: $46.35. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

Prices were higher in overnight trading. The key “outside markets” are bullish early today–crude oil prices are higher and the U.S. dollar is lower. Grain market bulls have some fresh upside near-term technical momentum on their side. Bulls are hoping market lows are in place.