Jim's Morning Markets Report--Dec. 13

December 13, 2013 12:40 AM
 

Friday, December 13--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, the U.S. dollar hit a five-year high
against the Japanese yen in the currency markets. Notions
the Japanese central bank will continue to try to inflate
its economy by printing money, whereas the U.S. Federal
Reserve is set to back off its easy-money accelerator, are
the main force pushing Dollar-Yen higher.

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
and this week’s U.S. government budget deal suggest the Fed
will move up its timeline for implementing a tapering of its
monthly bond-buying program, also called quantitative
easing. A growing number of market watchers think the Fed
will announce a tapering at next week’s FOMC meeting. Many
traders and analysts reckon the actual announcement of the
Fed tapering will cause high volatility in markets. I’m
taking the other side of that trade. While market prices
could jiggle a bit in the immediate aftermath of the
announcement, I don’t think markets will experience
unsettling high volatility. Reason: Traders and investors
have had many weeks to digest and factor into market prices
the near certainty that the Fed will taper at next week’s
meeting, or early next year.

U.S. economic data due for release Friday includes the
producer price index.

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 firmer in early U.S. trading but
did hit a four-week low overnight. 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 Thursday’s
high of 1,783.00 and then at 1,800.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at the overnight low of 1,767.40
and then at 1,755.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is below 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 resistance is located at Thursday’s
high of 3,479.50 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 3,452.50 and then at
3,435.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today. But bulls have
faded recently. Buy stops likely reside just above technical
resistance at 15,750 and then at Thursday’s high of 15,775.
Sell stops likely reside just below technical support at
Thursday’s low of 15,650 and then at 15,600. Shorter-term
moving averages are bearish early today, as the 4-day moving
average is below the 9-day. The 9-day moving average is
below the 18-day moving average. Shorter-term oscillators
(RSI, slow stochastics) are bearish 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. 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 early today.
Shorter-term resistance lies at the overnight high of 129
17/32 and then at 130 even. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
this week’s low of 129 2/32 and then at 128 31/32. 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 to bearish
early today. Shorter-term resistance lies at the overnight
high of 124.10.0 and then at Thursday’s high of 124.17.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at this week’s low of 124.03.5
and then at 124.00.0. 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 higher early today on short
covering in a bear market. The greenback bears still 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 80.570 and then at 80.750. Shorter-term
support is seen at the overnight low of 80.305 and then at
80.000. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are lower early today on
profit taking. Bulls still have the overall near-term
technical advantage. In January Nymex crude, look for buy
stops to reside just above resistance at the overnight high
of $97.62 and then at $98.00. Look for sell stops just below
technical support at $96.50 and then at $96.00. Wyckoff's
Intra-Day Market Rating: 4.5

GRAINS

Markets were lower overnight. Grain markets are suffering
from a lack of fresh, bullish fundamental news. Technically,
corn and wheat futures bears are still in full control.
Soybean bulls have the near-term technical advantage. My
bias is that corn and wheat prices do not have much more
downside potential given their mature bear market status. My
bias is also that soybean prices do not have much more
upside potential, mainly because corn and wheat prices have
been beaten down.

 

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