Jim's Morning Markets Report--Dec. 17

December 17, 2013 12:36 AM
 

Tuesday, December 17--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The highly anticipated U.S. Federal Reserve Open Market
Committee (FOMC) meeting begins Tuesday and ends Wednesday
afternoon with a statement. Recent upbeat U.S. economic data
and last 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—possibly as early as this week. A growing number of
market watchers think the Fed will indeed announce a
tapering this week. However, there is no clear consensus on
precisely when the Fed will make its move. Many traders and
analysts reckon the actual announcement of the Fed tapering
will cause high volatility in markets. While market prices
could gyrate 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.

In overnight news, reports in the Euro zone showed inflation
remains extremely low and almost to the point of being
problematic. European Union consumer prices fell in
November, while the overall inflation rate inched up to
0.9%, on an annual basis. In the U.K. the rate of inflation
in November fell to its lowest level in four years, at 2.1%
on an annual basis.

The important German ZEW economic expectations survey was
released Tuesday and handily beat expectations. The December
reading was 62.0 versus 54.6 in November. A level of 55.0
was expected. Germany is the economic work horse of the
European Union.

U.S. economic data due for release Tuesday includes the
weekly Goldman Sachs and Johnson-Redbook retail sales
reports, the NAHB housing market index, real earnings, and
the consumer price index.

Wyckoff’s Daily Risk Rating: 6.0 (Wednesday afternoon’s FOMC
meeting results ratchets up the risk in the market place
ahead of that development.)

(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 steady in early U.S.
trading. 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 neutral early today. Today, shorter-term
technical resistance comes in at Monday’s high of 1,786.20
and then at 1,800.00. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at 1,770.00 and then at Monday’s low of 1,755.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady 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 Monday’s
high of 3,491.25 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 3,463.75 and then at
3,450.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0.

Dow futures: Prices are slightly higher early today. Buy
stops likely reside just above technical resistance at
Monday’s high of 15,875 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 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 neutral
early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today on short
covering. The bears still have the overall near-term
technical advantage as prices are in a two-month-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 129
24/32 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 last week’s low
of 129 2/32. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5
 
March U.S. T-Notes: Prices are higher early today on short
covering. Shorter-term moving averages (4- 9- 18-day) are
still 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 bullish early today. Shorter-term resistance
lies at Monday’s high of 124.16.0 and then at 124.24.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at last 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: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today,
on tepid short covering. The greenback bears still have the
overall near-term technical advantage. Prices are in a six-
week-old downtrend on the daily bar chart. Slow stochastics
for the dollar index are neutral early today. The dollar
index finds shorter-term technical resistance at Monday’s
high of 80.370 and then at last week’s high of 80.570.
Shorter-term support is seen at the overnight low of 80.135
and then at last week’s low of 79.875. Wyckoff's Intra Day
Market Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly lower early
today. Bulls still have the slight overall near-term
technical advantage. In January Nymex crude, look for buy
stops to reside just above resistance at Monday’s high of
$97.69 and then at $98.00. Look for sell stops just below
technical support at $97.00 and then at $96.50. Wyckoff's
Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed but near steady overnight. Grain markets
are suffering from a lack of export demand for U.S. grains.
Also, the South American soybean and corn crops are looking
good early in the growing season. Technically, corn and
wheat futures bears are in full control. Soybean bulls have
the near-term technical advantage.
 

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