Wednesday, December 17–Jim Wyckoff’s Morning Web Log
OVERNIGHT/EARLY MORNING DEVELOPMENTS
The market feature in overnight/early morning trading today is higher U.S. Treasury futures prices that are at contract and record high price levels.
JIM’S MARKET THOUGHT OF THE DAY *
Many commodity futures markets are in rally modes despite the Fed warning on Tuesday that deflationary pressures are looming. Traders are focusing not on the demand prospects for commodities (bearish amid world economic recession) but instead on the specter of future price inflation due to the massive injections of money into the financial system by major central banks of the world. Remember that futures traders are front-runners and do factor in very early the fundamentals in a market. However, it would not surprise me to see some commodity markets back down from their recent rallies and retest their recent lows at some point. Bullish commodity traders are also looking at the declining value of the U.S. dollar as a positive sign for commodity futures prices. However, my bias is that the weak dollar-strong commodity price correlation will not be as strong as it was during most of 2008. Bottom line: At this point in time I cannot yet become a big commodity market bull.–Jim
U.S. STOCK INDEXES
The U.S. stock indexes are weaker in early morning trading today, after solid gains in the wake of the FOMC announcement on Tuesday afternoon. 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 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 early today. Today, shorter-term technical support comes in at the overnight low of 887.00 and then at Tuesday’s low of 868.90. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at 900.00 and then at the overnight high of 914.50. 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:————- 898.90
1st Support:——– 882.80
2nd Support:——– 852.80
1st Resistance:—– 928.90
2nd Resistance:—– 945.00
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. 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 the overnight 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 Tuesday’s low of 1,192.00. On the upside, short-term resistance is seen at the overnight high of 1,241.75 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: 4.0
Today’s key near-term Fibonacci support/resistance level: 1,213.00
PIVOT POINT LEVELS FOR MARCH NASDAQ:
Pivot:———— 1,227.35
1st Support:—— 1,205.70
2nd Support:—— 1,170.35
1st Resistance:— 1,262.70
2nd Resistance:— 1,284.35
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: 4.0
Today’s key near-term Fibonacci support/resistance level: 8,776
PIVOT POINT LEVELS FOR MARCH DOW:
Pivot:———— 8,833
1st Support:—— 8,706
2nd Support:—— 8,498
1st Resistance:— 9,041
2nd Resistance:— 9,168
U.S. TREASURY BONDS AND NOTES
U.S. T-Bonds and T-Notes futures are solidly higher in early trading today, and set fresh highs. 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 139 even and then at the overnight low of 138 9/32. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight contract high of 139 30/32 and then at 140 even. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 8.0
Today’s key near-term Fibonacci support/resistance level: 137 1/32
PIVOT POINT LEVELS FOR MARCH U.S. T-BONDS:
Pivot:———– 137 6/32
1st Support:—– 136 5/32
2nd Support:—– 134 10/32
1st Resistance:– 139 1/32
2nd Resistance:– 140 2/32
March U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are bullish early today. Buy stops likely reside just above shorter-term technical resistance at the overnight contract high of 127.17.5 and then at 128.00.0. 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 127.00.0 and then at the overnight low of 126.22.5. Wyckoff’s Intra Day Market Rating: 8.0
Today’s key near-term Fibonacci support/resistance level: 125.15.0
PIVOT POINT LEVELS FOR MARCH U.S. T-NOTES:
Pivot:———– 126 7/32
1st Support:—– 125 11/32
2nd Support:—– 123 24/32
1st Resistance:– 127 26/32
2nd Resistance:– 128 22/32
CURRENCIES
The March U.S. dollar index is weaker again in early trading today. Prices hit a fresh 2.5-month low overnight. The bulls are in serious trouble. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.39 and then at 81.75. Shorter-term support is seen at the overnight low of 80.36 and then at 80.00. Today’s key near-term Fibonacci support/resistance level: 82.97. Wyckoff’s Intra Day Market Rating: 4.0
The December Euro is higher in early electronic trading and hit a fresh 2.5-month high overnight. Bulls still have solid upside near-term power. Euro finds sell stop orders are likely located just below technical support at the overnight low of 1.3973 and then at 1.3900. Shorter-term technical resistance for the Euro is seen at 1.4100 and then at the overnight high of 1.4159. 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: 1.3860. Wyckoff’s Intra Day Market Rating: 6.0
GOLD
Gold is higher in early dealings today, amid the weaker U.S. dollar. For February gold, shorter-term technical resistance is seen at Tuesday’s high of $860.80 and then at $870.00. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $850.00 and then at the overnight low of $847.20. 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 slightly higher early today. In January crude, look for buy stops to reside just above resistance at the overnight high of $45.50 and then just above resistance at $46.00. Look for sell stops just below technical support at the overnight low of $42.60 and then more sell stops just below support at $42.00. Today’s key near-term Fibonacci support/resistance level: $44.25. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Prices were higher in overnight trading. The key “outside markets” are bullish early today–crude oil prices are firmer and the U.S. dollar is weaker. Grain market bulls have fresh upside near-term technical momentum on their side. Bulls are hoping market lows are in place. The outside markets will continue to dictate price action in the grains.
