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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Jan. 4

Jan 04, 2013

Friday, January 4--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The minutes of the latest meeting of the Federal Reserve’s
Open Market Committee, held in early December, were released
Thursday afternoon and they somewhat surprisingly revealed
several FOMC members believe that quantitative easing of
U.S. monetary policy—specifically its hefty monthly bond-
buying program--should be wound down during 2013. Fed
Chairman Bernanke has said in recent months that interest
rates will not rise before 2015. Thus, many market watchers
had just assumed the U.S. central bank would also keep what
has been called by many “QE Infinity” in place well beyond
this year. However, the recent better U.S. economic data
readings have been an early clue the Fed should be
considering taking its foot off the gas regarding aggressive
monetary policy easing, which does carry with it problematic
inflationary implications. Nevertheless, Thursday’s news has
spooked the commodity market bulls and in turn has given the
U.S. dollar index a major boost higher. The past four years
of very easy U.S. monetary policy have been an underlying
bullish factor for the raw commodity sector. In other news,
the most important U.S. economic report of the month is due
on Friday morning—the Labor Department’s employment
situation report. The key non-farm payrolls figure is
expected to have risen by 150,000 in December, with the
unemployment rate is forecast at 7.7%, which is unchanged
from last month. A strong U.S. jobs report Friday would
further bolster the case for those Fed officials who reckon
the central bank should back off on further quantitative
easing measures. In European news overnight, Euro zone
inflation held steady in December, at  a 2.2% annualized
rate—the same as in November. Other U.S. economic data due
for release Friday includes manufacturers’ shipments and
inventories, the ISM non-manufacturing report on business,
the global services PMI, and the weekly DOE energy stocks
report.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early trading
today, on some chart consolidation after hitting a 2.5-month
high on Thursday. Bulls still have some upside near-term
technical 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 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 Thursday’s
high of 1,460.50 and then at the September high of 1,467.50.
Buy stops likely reside just above those levels. Downside
support for active traders today is located at 1,445.80 and
then at 1,439.30. 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 near-term technical momentum. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Shorter-term technical resistance is located at Thursday’s
high of 2,747.00 and then at 2,760.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at Thursday’s low of 2,719.00 and then at
2,700.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5

Dow futures: Prices are near steady early today on some
chart consolidation from recent strong gains. Bulls still
have some upside near-term technical momentum. Sell stops
likely reside just below technical support at Thursday’s low
of 13,290 and then at 13,250. Buy stops likely reside just
above technical resistance at Thursday’s high of 13,355 and
then at 13,400. Shorter-term moving averages are neutral
early today, as the 4-day moving average is above the 9-day.
The 9-day moving average is below the 18-day moving average.
Shorter-term oscillators (RSI, slow stochastics) are neutral
to bullish early today. Wyckoff's Intra-Day Market Rating:
5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are solidly lower early today and
hit a fresh 3.5-month low overnight. Bears have strong near-
term downside technical momentum. Shorter-term moving
averages (4- 9- 18-day) are bearish early today. The 4-day
moving average is below the 9-day. The 9-day is below the
18-day moving average. Oscillators (RSI, slow stochastics)
are bearish early today. Shorter-term resistance lies at 144
even and then at the overnight high of 144 17/32. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at 143 16/32 and then at the
September low of 143 8/32. Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 3.0

March U.S. T-Notes: Prices are solidly lower early today
and hit a fresh 2.5-month low overnight. Bears have solid
downside momentum. Shorter-term moving averages (4- 9- 18-
day) are bearish early today. The 4-day moving average is
below the 9-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are bearish
early today. Shorter-term resistance lies at 131.08.0 and
then at the overnight high of 131.17.5. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 131.05.0 and then at
131.00.0. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 3.0

U.S. DOLLAR INDEX

The March U.S. dollar index is sharply higher in early U.S.
trading and hit a fresh four-week high overnight. Bulls are
gaining good upside near-term technical momentum this week.
Slow stochastics for the dollar index are bullish early
today. The dollar index finds shorter-term technical
resistance at the December high of 81.05 and then at 81.25.
Shorter-term support is seen at the overnight low of 80.67
and then at 80.50. Wyckoff's Intra Day Market Rating: 7.0

NYMEX CRUDE OIL

Crude oil prices are lower early today on profit taking
after hitting a 2.5-month high on Wednesday. The stronger
U.S. dollar is also a negative for crude. In February Nymex
crude, look for buy stops to reside just above resistance at
$92.50 and then at $93.00. Look for sell stops just below
technical support at $91.00 and then at $90.00. Wyckoff's
Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight. The key “outside markets” are
bearish for grains early Friday—sharply higher U.S. dollar
index and lower crude oil prices. The near-term technical
postures of the grain markets are fully bearish at present.
Would-be bulls need to look for the very early technical
clues that the near-term price downtrends in the grains
have ended. Nothing of that nature has occurred yet.
Traders will scrutinize this morning’s weekly USDA export
sales report.
 

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