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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Dec. 5

Dec 05, 2012

Wednesday, December 5--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

A heavy slate of U.S. economic data Wednesday may provide
some fresh fundamental news to move the markets. In
overnight news, Asian stocks rallied on news that Chinese
government officials have said they want to stimulate their
economy by implementing more construction projects. Also,
China’s purchasing managers index showed further expansion
in November. There was more dour economic news coming out of
the European Union, further suggesting that bloc is in
recession. Retail sales fell in October, while purchasing
manager surveys in the region showed private-sector business
activity declined in November, amid reduced consumer
spending. Meanwhile, tepid demand at a Spanish government
bond auction pushed Spanish bond yields up Wednesday.
However, the Spanish 10-year bond yield, at 5.33%, is still
below the critical 6% level that is deemed a danger point.
The Euro currency and European stocks slipped from their
daily highs on the fresh economic news. In the U.S., the
focus of the market place remains on the “fiscal cliff” tax
increases and spending cuts that is fast approaching. U.S.
lawmakers are still jawboning on the matter, with the market
place now paying less attention to the politicians’
rhetoric. While the market place presently perceives odds
are higher than not that there will be a last-minute
agreement among U.S. lawmakers to avoid the fiscal cliff,
the overall situation has been a bearish drag on many
markets, including the raw commodities and stock markets.
The market place is starting to look ahead to next week’s
last Federal Reserve FOMC meeting of the year, on December
10 and 11. The “Operation Twist” program ends and the FOMC
members must decide whether to extend the bond-buying
program. Many believe the Fed will continue to purchase U.S.
Treasuries and implement “QE4” at next week’s meeting. That
would be raw-commodity market bullish, including bullish for
the precious metals markets. U.S. economic data due for
release Wednesday includes the weekly MBA mortgage
applications survey, the ADP national employment report, 
manufacturers’ shipments and orders, the ISM non-
manufacturing report, the global servicers PMI and the
weekly DOE energy stocks report.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. Bulls still
have a bit of upside near-term technical momentum on their
side. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are
neutral early today. Today, shorter-term technical
resistance comes in at this week’s high of 1,423.90 and then
at the November high of 1,431.40. Buy stops likely reside
just above those levels. Downside support for active traders
today is located at 1,400.00 and then at last week’s low of
1,383.20. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. Bulls
still have some upside momentum. The shorter-term moving
averages (4- 9-and 18-day) are bullish early today. The 4-
day moving average is above the 9-day and 18-day. The 9-day
average is above the 18-day. Short-term oscillators (RSI,
slow stochastics) are neutral early today. Shorter-term
technical resistance is located at the overnight high of
2,679.25 and then at this week’s high of 2,698.50. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at this week’s low of 2,650.25
and then at 2,635.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-Day Market Rating: 5.5

Dow futures: Prices are firmer early today. Bulls still have
some upside technical momentum on their side. Sell stops
likely reside just below technical support at 12,933 and
then at 12,900. Buy stops likely reside just above technical
resistance at 13,000 and then at this week’s high of 13,070.
Shorter-term moving averages are 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
early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today.
Bulls still have the overall near-term technical advantage.
Shorter-term moving averages (4- 9- 18-day) are neutral
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day is below the 18-day moving average.
Oscillators (RSI, slow stochastics) are neutral early today.
Shorter-term resistance lies at the overnight high of 150
14/32 and then at 151 even. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 149 27/32 and then at Tuesday’s low of
149 15/32. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are slightly higher early today.
Bulls still have the overall near-term technical advantage.
Shorter-term moving averages (4- 9- 18-day) are neutral
early today. The 4-day moving average is above the 9-day
and 18-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 133.24.5 and then at the November high of 133.27.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at the overnight low of
133.16.0 and then at Tuesday’s low of 133.11.5. 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 firmer in early U.S. trading
today, on short covering after hitting another fresh six-
week low overnight. Bears still have some downside near-term
technical momentum. Slow stochastics for the dollar index
are bearish early today. The dollar index finds shorter-term
technical resistance at Tuesday’s high of 80.10 and then at
this week’s high of 80.34. Shorter-term support is seen at
the overnight low of 79.78 and then at 79.50. Wyckoff's
Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today. Bulls
still have a bit of upside technical momentum on their side.
In January Nymex crude, look for buy stops to reside just
above resistance at the overnight high of $89.05 and then at
$90.00. Look for sell stops just below technical support at
$88.00 and then at $87.00. Wyckoff's Intra-Day Market
Rating: 5.5

GRAINS

Markets were firmer in overnight trading, on short covering
and amid a generally higher raw commodity sector this
morning. Trading in the grains has been choppier recently.
My bias remains that there is not strong downside price
potential in the grains in the coming weeks and months.
 

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