Friday, December 19–Jim Wyckoff’s Morning Web Log
OVERNIGHT/EARLY MORNING DEVELOPMENTS
The market feature in overnight/early morning trading today is a sharply higher U.S. dollar and sharply lower gold prices.
JIM’S MARKET THOUGHT OF THE DAY *
To become a better trader, one needs to know the pitfalls that lurk in the very challenging arena of futures trading. I wrote a feature story a while back on the top 10 mistakes that traders make, and how to avoid them. If you like to read the story, just send me an email at jim@jimwyckoff.com and I’ll attach the story and email it back to you.–Jim
U.S. STOCK INDEXES
The U.S. stock indexes are weaker in early morning trading today. Bulls are working on fledgling uptrends in prices, from the November lows.
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. 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 Thursday’s low of 873.50 and then at this week’s low of 856.50. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at the overnight high of 892.80 and then at 900.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 4.0
Today’s key near-term Fibonacci support/resistance level: 895.00.
PIVOT POINT LEVELS FOR MARCH S&P 500:
Pivot:————- 892.50
1st Support:——– 873.55
2nd Support:——– 854.60
1st Resistance:—– 911.45
2nd Resistance:—– 930.40
March Nasdaq Index: 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical support is located at the overnight low of 1,211.75. Sell stops likely reside just below that level, and then more sell stops are likely located just below technical support at 1,200.00. On the upside, short-term resistance is seen at 1,225.00 and then at Thursday’s high of 1,237.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
Today’s key near-term Fibonacci support/resistance level: 1,213.00
PIVOT POINT LEVELS FOR MARCH NASDAQ:
Pivot:———— 1,218.50
1st Support:—— 1,200.00
2nd Support:—— 1,174.50
1st Resistance:— 1,244.00
2nd Resistance:— 1,262.50
March Dow: Sell stops likely reside just below support at 8,550 and then more stops just below support at 8,500. 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 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 4.0
Today’s key near-term Fibonacci support/resistance level: 8,776
PIVOT POINT LEVELS FOR MARCH DOW:
Pivot:———— 8,716
1st Support:—— 8,571
2nd Support:—— 8,406
1st Resistance:— 8,881
2nd Resistance:— 9,026
U.S. TREASURY BONDS AND NOTES
U.S. T-Bonds and T-Notes futures are weaker in early trading today, on profit-taking pressure. Bulls still have the solid near-term technical advantage, but the markets are technically overbought and due for a pullback very soon.
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 140 16/32 and then at 140 even. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the contract high of 141 27/32 and then at 142 even. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Today’s key near-term Fibonacci support/resistance level: 138 6/32
PIVOT POINT LEVELS FOR MARCH U.S. T-BONDS:
Pivot:———– 140 26/32
1st Support:—– 139 24/32
2nd Support:—– 138 3/32
1st Resistance:– 142 15/32
2nd Resistance:– 143 17/32
March U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Buy stops likely reside just above shorter-term technical resistance at the overnight high of 128.07.0 and then at the contract high of 128.22.5. 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 127.16.0 and then at 127.00.0. Wyckoff’s Intra Day Market Rating: 5.0
Today’s key near-term Fibonacci support/resistance level: 126.15.0
PIVOT POINT LEVELS FOR MARCH U.S. T-NOTES:
Pivot:———– 128 even
1st Support:—– 127 9/32
2nd Support:—– 126 20/32
1st Resistance:– 128 21/32
2nd Resistance:– 129 12/32
CURRENCIES
The March U.S. dollar index is sharply higher in early trading today. A bullish selling “exhaustion tail” has formed on the daily chart, whereby the bears became exhausted at lower price levels on Thursday. This is an early clue that a market low is in place. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.22 and then at 82.50. Shorter-term support is seen at 81.50 and then at 81.00. Today’s key near-term Fibonacci support/resistance level: 81.73. Wyckoff’s Intra Day Market Rating: 6.0
The December Euro is solidly lower in early electronic trading. The bulls became exhausted at higher price levels on Thursday and a bearish buying “exhaustion tail” has formed on the daily chart to suggest a near-term top is in place. Euro finds sell stop orders are likely located just below technical support at the overnight low of 1.3900 and then at 1.3800. Shorter-term technical resistance for the Euro is seen at 1.4000 and then at 1.4100. Buy stops likely reside just above those levels. Slow stochastics for the Euro are bearish early today. Today’s key near-term Fibonacci support/resistance level: 1.3859. Wyckoff’s Intra Day Market Rating: 4.0
GOLD
Gold is solidly lower in early dealings today, as the bulls appear to have become exhausted during this recent rally. No serious chart damage has occurred on this sell off, but the bulls have faded. For February gold, shorter-term technical resistance is seen at the overnight high of $854.90 and then at $860.00. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $830.10 and then at $825.00. Today’s key near-term Fibonacci support/resistance level: $829.00. Wyckoff’s Intra-Day Market Rating: 4.0
CRUDE OIL
Crude oil prices are near steady early today. Prices hit a fresh contract low and 4.5-year low overnight. In February crude, look for buy stops to reside just above resistance at the overnight high of $42.65 and then just above resistance at $43.00. Look for sell stops just below technical support at the overnight contract low of $41.35 and then more sell stops just below support at $40.00. Today’s key near-term Fibonacci support/resistance level: $45.80. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Prices were lower in overnight trading. The key “outside markets” are neutral to bearish early today–crude oil prices are near steady and the U.S. dollar is sharply higher. While bulls are hoping market lows are in place, solid losses today would deflate the corn and soybean bulls. I cannot be a strong bull in the grain markets, at present, given the severe economic recession gripping the U.S. and the world. At some point the grains will become value buys, but my bias is that now is not that time.
