Jim's Morning Markets Report--Dec. 12

December 12, 2013 01:06 AM
 

Thursday, December 12--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, industrial output in the European Union
fell sharply in October—down 1.1% from September and the
steepest monthly decline in a year. Forecasts were for the
number to be up 0.2%. This report is one more argument for
the European Central Bank to keep its monetary policy very
accommodative. ECB president Mario Draghi on Thursday
reiterated his desire to keep the ECB’s easy money policy in
place and he also said deflation is not a problem in the EU.
However, the fact that Draghi keeps bringing up the
deflation matter, amid an extended period of very low
inflation in the EU, suggests he is indeed at least a bit
worried about it.

Traders and investors are looking forward to next week’s
meeting (Dec. 17-18) of the U.S. Federal Reserve’s Open
Market Committee (FOMC). Recent upbeat U.S. economic data
suggests the Fed might move up its timeline for implementing
a tapering of its monthly bond-buying program, also called
quantitative easing, including a growing number who think
the Fed will announce a tapering at next week’s FOMC
meeting. This week’s U.S. government budget agreement by
congressional leaders is another factor that could work in
favor of the Fed tapering sooner. Remember that the last
budget impasse and U.S. government shutdown played a part in
the Fed holding off on a tapering move.

Gold is under selling pressure this morning, partly due to
the U.S. budget deal reached this week.

U.S. economic data due for release Thursday includes the
weekly jobless claims report, import and export prices,
retail sales, and manufacturing and trade inventories.

Wyckoff’s Daily Risk Rating: 5.0 (There is not much in the
way of important worldwide economic data due out until next
week’s FOMC meeting. Thus, trading activity is likely to be
more subdued until the middle of next week.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge
investor risk appetite in the world market place each day.
Each day I assess the "risk-on" or "risk-off" trader
mentality in the market place with a numerical reading of 1
to 10, with 1 being least risk-averse (most risk-on) and 10
being the most risk-averse (risk-off), and 5 being neutral.

--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near slightly lower in early
U.S. trading and hit a three-week low. The shorter-term
moving averages (4-, 9- and 18-day) are bearish early today.
The 4-day moving average is below the 9-day and 18-day. The
9-day is below the 18-day moving average. Short-term
oscillators (RSI, slow stochastics) are bearish early today.
Today, shorter-term technical resistance comes in at
1,790.00 and then at 1,800.00. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at 1,773.00 and then at 1,755.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today.
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 resistance is located at the
overnight high of 3,476.00 and then at 3,500.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at the overnight low of 3,463.25
and then at 3,450.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker early today. Buy stops likely
reside just above technical resistance at 15,850 and then at
15,900. Sell stops likely reside just below technical
support at 15,800 and then at 15,750. 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 early today. Wyckoff's
Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today. The
bears have the overall near-term technical advantage as
prices are in a seven-week-old downtrend on the daily bar
chart. Shorter-term moving averages (4- 9- 18-day) are
neutral early today. The 4-day moving average is above the
9-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 129 20/32 and then at 130 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 129 10/32 and then at
this week’s low of 129 2/32. Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 5.0
 
March U.S. T-Notes: Prices are slightly lower early today.
Shorter-term moving averages (4- 9- 18-day) are bearish
early today. The 4-day moving average is below 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 124.17.5 and then at Wednesday’s high of 124.26.5. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 124.12.0 and
then at this week’s low of 124.06.5. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today
and hovering near a six-week low. The greenback bears have
the overall near-term technical advantage. Slow stochastics
for the dollar index are bullish early today. The dollar
index finds shorter-term technical resistance at the
overnight high of 80.125 and then at Wednesday’s high of
80.215. Shorter-term support is seen at Wednesday’s low of
79.875 and then at 79.750. Wyckoff's Intra Day Market
Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly higher early
today. Bulls have the near-term technical advantage. In
January Nymex crude, look for buy stops to reside just above
resistance at $98.00 and then at this week’s high of $98.75.
Look for sell stops just below technical support at $97.00
and then at $96.50. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were weaker overnight. Grain traders are focusing on
export demand for U.S. grains and will closely scrutinize
Thursday morning’s weekly USDA export sales report.
Technically, corn and wheat futures bears are still in full
control. Soybean bulls have the near-term technical
advantage.
 

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