Thursday, December 31--Jim Wyckoff's Morning Web
Log

Note: I am working a limited schedule this week. My
friend and fellow trader/analyst Ken Seehusen is
producing my reports. Ken's style is different than
mine, but I think you'll enjoy his style, too.--Jim

The STOCK INDEXES & MARKETS

The March NASDAQ 100 was higher overnight and appears poised to extend the
rally into the end of this year. Stochastics and the RSI are overbought but
are neutral signaling that sideways to higher prices are possible near-term.
If March extends this year’s rally, the 75% retracement level of the
2007-2008-decline on the weekly continuation chart crossing at 1947.00 is
the next upside target. Closes below the 20-day moving average crossing at
1819.20 would confirm that a short-term top has been posted. First
resistance is the overnight high crossing at 1882.00. Second resistance is
the 75% retracement level of the 2007-2008-decline on the weekly
continuation chart crossing at 1947.00. First support is the 10-day moving
average crossing at 1848.17. Second support is the 20-day moving average
crossing at 1819.20. The March NASDAQ 100 was up 2.00 pts. at 1878.75 as of
5:57 AM CST. Overnight action sets the stage for a higher opening by March
NASDAQ 100 when the day session begins later this morning.

The March S&P 500 index was higher due to short covering overnight as it
consolidates some of this week’s decline. Stochastics and the RSI are
overbought and are turning bearish hinting that a short-term top might be in
or is near. However, closes below the 20-day moving average crossing at
1106.61 are needed to confirm that a short-term top has been posted. If
March extends this year’s rally, the 62% retracement level of the
2007-2008-decline crossing at 1155.15 is the next upside target. First
resistance is Tuesday’s high crossing at 1128.20. Second resistance is the
62% retracement level of the 2007-2008-decline crossing at 1155.15. First
support is the 10-day moving average crossing at 1114.21. Second support is
the 20-day moving average crossing at 1106.61. The March S&P 500 Index was
up 2.20 pts. at 1124.30 as of 5:58 AM CST. Overnight action sets the stage
for a higher opening by the March S&P 500 index when the day session begins
later this morning.

INTEREST RATES

March T-bonds were lower overnight as they consolidate some of this week’s
short covering gains but remain above the 62% retracement level of the
June-October rally crossing at 115-02. Stochastics and the RSI are oversold
and are turning bullish signaling that a short-term low might be in or is
near. However, closes above the 20-day moving average crossing at 117-15 are
needed to confirm that a short-term low has been posted. If March resumes
this month’s decline, the 75% retracement level of the June-October rally
crossing at 113-11 is the next downside target. First resistance is the
10-day moving average crossing at 116-10. Second resistance is the 20-day
moving average crossing at 117-15. First support is Monday’s low crossing at
114-26. Second support is the 75% retracement level of the June-October
rally crossing at 113-11.

ENERGY MARKETS

February crude oil was higher overnight as it extends the rally off this
month’s low. Stochastics and the RSI are overbought but remain neutral to
bullish signaling that sideways to higher prices are possible near-term. If
February extends this rally, the reaction high crossing at 80.40 is the next
upside target. Closes below the 20-day moving average crossing at 75.47 are
needed to confirm that a short-term top has been posted. First resistance is
the overnight high crossing at 79.98. Second resistance is the reaction high
crossing at 80.40. First support is the 10-day moving average crossing at
76.77. Second support is the 20-day moving average crossing at 75.47.

CURRENCIES

The March Dollar was lower overnight and is trading below initial support
marked by the 10-day moving average crossing at 78.20. Stochastics and the
RSI have turned bearish hinting that a short-term top might be in or is
near. Closes below the 20-day moving average crossing at 77.36 are needed to
confirm that a short-term top has been posted. If March renews this month’s
rally, the 38% retracement level of the 2008-2009-decline crossing at 79.72
is the next upside target. First resistance is last Tuesday’s high crossing
at 78.77. Second resistance is the 38% retracement level of the
2008-2009-decline crossing at 79.72. First support is Tuesday’s low crossing
at 77.67. Second support is the 20-day moving average crossing at 77.36.

The March Euro was higher overnight and trading above initial resistance
marked by the 10-day moving average crossing at 143.360. Stochastics and the
RSI have turned bullish hinting that a short-term low might be in or is
near. Closes above the 20-day moving average crossing at 145.237 are needed
to confirm that a short-term low has been posted. If March renews this month
’s decline, the 38% retracement level of the 2008-2009-decline crossing at
140.976 is the next downside target. First resistance is Tuesday’s high
crossing at 144.570. Second resistance is the 20-day moving average crossing
at 145.237. First support is last Tuesday’s low crossing at 142.150. Second
support is the 38% retracement level of the 2008-2009-decline crossing at
140.976.

PRECIOUS METALS

February gold was higher overnight and trading above initial resistance
marked by the 10-day moving average crossing at 1100.30. Overnight weakness
in the Dollar is helping to support the precious metals markets. Stochastics
and the RSI remain neutral to bullish hinting that a short-term low might be
in or is near. Closes above the 20-day moving average crossing at 1122.40
are needed to confirm that a short-term low has been posted. If February
renews this month’s decline, the 38% retracement level of the
20008-2009-rally crossing at 1032.60 is the next downside target. First
resistance is Monday’s high crossing at 1114.50. Second resistance is the
20-day moving average crossing at 1122.40. First support is last Tuesday’s
low crossing at 1075.20. Second support is the 38% retracement level of the
20008-2009-rally crossing at 1032.60.

GRAINS

March corn was higher overnight and is poised to extend this week’s rally. A
weaker Dollar along with spillover strength from a number of outside markets
helped to underpin the corn market overnight. The high-range close overnight
sets the stage for a steady to higher opening when the day session begins.
Stochastics and the RSI are overbought but remain neutral to bullish hinting
that sideways to higher prices are possible near-term. If March extends this
week’s rally, the reaction high crossing at 4.21 1/4 is the next upside
target. Closes below the 20-day moving average crossing at 4.01 3/4 would
temper the near-term friendly outlook. From a broad perspective, March corn
needs to close above 4.25 or below 3.77 1/2 are needed to confirm a breakout
of this fall’s trading range. First resistance is Monday’s high crossing at
4.18 3/4. Second resistance is the reaction high crossing at 4.21 1/4. First
support is the 10-day moving average crossing at 4.06 3/4. Second support is
the 20-day moving average crossing at 4.01 3/4.

March wheat was higher overnight and is poised to extend this week’s rally
above the 20-day moving average. The high-range close sets the stage for a
steady to higher opening when the day session begins trading later this
morning. Stochastics and the RSI remain bullish signaling that sideways to
higher prices are possible near-term. If March extends Monday’s rally, the
50% retracement level of the November-December decline crossing at 5.59 1/2
is the next upside target. Closes below the 10-day moving average crossing
at 5.32 3/4 are needed to confirm that a short-term top has been posted.
First resistance is Tuesday’s high crossing at 5.54 3/4. Second resistance
is the 50% retracement level of the November-December decline crossing at
5.59 1/2. First support is the 20-day moving average crossing at 5.38 1/2.
Second support is the 10-day moving average crossing at 5.32 3/4.

SOYBEAN COMPLEX

March soybeans were higher overnight as they extend this week’s rally. The
high-range overnight close sets the stage for a steady to higher opening
when the day session begins later this morning. Stochastics and the RSI
remain bullish signaling that sideways to higher prices are possible
near-term. If March extends this week’s rally, the reaction high crossing at
10.77 1/4 is the next upside target. Closes below the 10-day moving average
crossing at 10.25 1/2 would temper the near-term friendly outlook in the
market. First resistance is the overnight high crossing at 10.52 3/4. Second
resistance is the reaction high crossing at 10.77 1/4. First support is the
20-day moving average crossing at 10.39. Second support is the 10-day moving
average crossing at 10.25 1/2.