Big Data Day Friday; Look for Active Trading in Many Markets

* LATEST MARKET DEVELOPMENTS *

Arguably the most important economic report of the month is Friday morning’s monthly U.S. jobs report. The key non-farm payrolls figure of the Labor Department’s employment report is expected to show a rise of around 200,000 jobs in December. The unemployment rate is expected to remain steady at 7.0%. Any non-farm jobs figure that deviates significantly from the consensus forecast is likely to be a markets-mover. Interestingly, a wire report Friday morning said the S&P stock index has rallied on the Friday of the jobs report for the past eight straight months.

In overseas trading overnight, China’s trade surplus narrowed to $25.6 billion in December from $33.8 billion in November. The forecast was for a reading of $32.2 billion. China exports were up 4.3%, year-on-year, in December. Imports were up 8.3% on the year. The export figure was viewed as disappointing. China overtook the U.S. in 2013 as the largest trading country.

European stocks firmed overnight following some upbeat economic data out of France. France’s industrial output rose by 1.3% in November from October, versus expectations of a 0.4% rise. This continues a string of positive economic data coming out of the European Union.

Other U.S. economic data due for release Friday includes the monthly wholesale trade report, the IBD/TIPP economic optimism index and the USDA quarterly grain stocks report.

Wyckoff’s Daily Risk Rating: 8.0 (Today’s monthly U.S. jobs is likely to be very market-sensitive.)

(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 futures: Prices are firmer in early U.S. trading and pushing back toward the record high. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the record high of 1,846.50 and then at 1,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,832.70 and then at Thursday’s low of 1,824.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is located at Thursday’s high of 3,577.00 and then at the December high of 3,594.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,548.50 and then at Thursday’s low of 3,535.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are higher early today and closing in on a new record high. Buy stops likely reside just above technical resistance at this week’s high of 16,492 and then at the record high of 16,535. Sell stops likely reside just below technical support at 16,400 and then at this week’s low of 16,320. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is above 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 steady early today and hovering near a three-week high. Short covering in a bear market is featured this week. The bears still have the overall near-term technical advantage as prices are in a 10-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 129 14/32 and then at 129 19/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129 4/32 and then at Thursday’s low of 128 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 March U.S. T-Notes: Prices are firmer early today on short covering in a bear market. Prices still are in a 10-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 123.13.0 and then at 123.19.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.08.5 and then at this week’s low of 122.30.0. 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 early today after hitting a six-week high Wednesday. The greenback bulls have gained upside momentum recently. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 81.335 and then at 81.500. Shorter-term support is seen at 80.980 and then at 80.755. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

February Nymex crude oil prices are higher early today and seeing short covering after hitting a 6.5-month low Thursday. Bears still have the overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at $93.00 and then at $93.50. Look for sell stops just below technical support at the November low of $92.10 and then at Thursday’s low of $91.24. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed overnight as traders await Friday morning’s USDA quarterly grain stocks report. That report is expected to be generally bearish. However, it would not surprise me to see a “sell-the-rumor, buy-the-fact” rally in grains after Friday’s report, as prices this weak have faltered ahead of the USDA data. Technically, corn, soybean and wheat futures bears are in near-term control. Corn and soybean traders continue to keep an eye on South American weather, but so far it has not been significantly worrisome for the crops. Friday’s price action in grain futures could set the tone for price action in the grains for the next few weeks.