Thursday, December 18–Jim Wyckoff’s Morning Web Log
OVERNIGHT/EARLY MORNING DEVELOPMENTS
The market feature in overnight/early morning trading today is a sharply lower U.S. dollar that continues to get hammered down at a record pace.
JIM’S MARKET THOUGHT OF THE DAY *
The steep descent in the value of the U.S. dollar the past week has been stunning and record-setting. My bias is that the steep decline, or at least the steepness of the decline, will not last much longer. The U.S. dollar index is already near-term oversold, from a technical standpoint, and due at least for an upside corrective bounce very soon. But would be bottom-pickers in the greenback should beware. For dollar bulls, first make the dollar show some early signs of near-term technical power, and that has certainly not occurred yet. One more thing: The weak dollar-stronger commodity price correlation has become uncoupled. Commodity bulls can no longer rely on a weak greenback to automatically be a strong positive force for them.–Jim
U.S. STOCK INDEXES
The U.S. stock indexes are near steady in early morning trading today. Bulls are working on a fledgling uptrend 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 neutral to bullish early today. Today, shorter-term technical support comes in at the overnight low of 901.30 and then at Wednesday’s low of 887.00. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at the overnight high of 909.70 and then at the December high of 918.50. 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: 895.00.
PIVOT POINT LEVELS FOR MARCH S&P 500:
Pivot:————- 902.70
1st Support:——– 887.35
2nd Support:——– 871.70
1st Resistance:—– 918.35
2nd Resistance:—– 933.70
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 neutral early today. Shorter-term technical support is located at Wednesday’s low of 1,206.75. Sell stops likely reside just below that level, and then more sell stops are likely located just below technical support at this week’s low of 1,192.00. On the upside, short-term resistance is seen at 1,240.00 and then at this week’s high of 1,249.00. 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: 1,213.00
PIVOT POINT LEVELS FOR MARCH NASDAQ:
Pivot:———— 1,226.75
1st Support:—— 1,208.50
2nd Support:—— 1,188.50
1st Resistance:— 1,246.75
2nd Resistance:— 1,265.00
March Dow: Sell stops likely reside just below support at 8,700 and then more stops just below support at 8,650. Buy stops likely reside just above shorter-term technical resistance at 8,800 and then just above resistance at 8,850. Shorter-term moving averages are still bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
Today’s key near-term Fibonacci support/resistance level: 8,776
PIVOT POINT LEVELS FOR MARCH DOW:
Pivot:———— 8,846
1st Support:—— 8,743
2nd Support:—— 8,687
1st Resistance:— 8,903
2nd Resistance:— 9,007
U.S. TREASURY BONDS AND NOTES
U.S. T-Bonds and T-Notes futures are higher in early trading today. Bulls still have the solid near-term technical advantage amid no clues of a market top being close at hand.
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 early today. Shorter-term technical support lies at the overnight low of 139 4/32 and then at 138 16/32. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the contract high of 140 12/32 and then at 141 even. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 7.0
Today’s key near-term Fibonacci support/resistance level: 137 8/32
PIVOT POINT LEVELS FOR MARCH U.S. T-BONDS:
Pivot:———– 139 10/32
1st Support:—– 138 8/32
2nd Support:—– 137 7/32
1st Resistance:– 140 11/32
2nd Resistance:– 141 13/32
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 the overnight high of 128.03.5 and then at the contract high of 128.13.0. 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 127.10.0 and then at 127.00.0. Wyckoff’s Intra Day Market Rating: 7.0
Today’s key near-term Fibonacci support/resistance level: 125.30.0
PIVOT POINT LEVELS FOR MARCH U.S. T-NOTES:
Pivot:———– 127 18/32
1st Support:—– 126 22/32
2nd Support:—– 125 27/32
1st Resistance:– 128 13/32
2nd Resistance:– 129 9/32
CURRENCIES
The March U.S. dollar index is sharply lower again in early trading today. Prices hit a fresh 11-week low overnight. The bears are in full command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 79.50 and then at 80.00. Shorter-term support is seen at the overnight low of 78.77 and then at 78.50. Today’s key near-term Fibonacci support/resistance level: 80.89. Wyckoff’s Intra Day Market Rating: 3.0
The December Euro is solidly higher in early electronic trading and hit a fresh three-month high overnight. Bulls still have solid upside near-term power. Euro finds sell stop orders are likely located just below technical support at 1.4500 and then at 1.4400. Shorter-term technical resistance for the Euro is seen at the overnight high of 1.4687 and then at 1.4750. 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: 1.4172. Wyckoff’s Intra Day Market Rating: 7.0
GOLD
Gold is higher in early dealings today, amid the sharply lower U.S. dollar. For February gold, shorter-term technical resistance is seen at the overnight high of $879.60 and then at Wednesday’s high of $883.60. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $862.60 and then at $850.00. Today’s key near-term Fibonacci support/resistance level: $859.00. Wyckoff’s Intra-Day Market Rating: 7.0
CRUDE OIL
Crude oil prices are near steady early today. Prices hit a fresh contract low and 4.5-year low overnight. In January crude, look for buy stops to reside just above resistance at the overnight high of $40.90 and then just above resistance at $42.00. Look for sell stops just below technical support at the overnight contract low of $39.19 and then more sell stops just below support at $38.00. Today’s key near-term Fibonacci support/resistance level: $44.25. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Prices were higher in overnight trading. The key “outside markets” are neutral to bullish early today–crude oil prices are near steady and the U.S. dollar is sharply lower. Bulls are hoping market lows are in place. The outside markets will continue to dictate price action in the grains. I still cannot become a strong bull in the grain markets, at present, given the severe economic recession gripping the U.S. and the world.
