Jim's Morning Markets Report--Dec. 5

December 5, 2013 12:40 AM
 

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

* LATEST MARKET DEVELOPMENTS *

Traders and investors are awaiting the next big batch of
important economic data due out Thursday. The headline event
Thursday will be the European Central Bank’s monthly
monetary policy meeting and the press conference by ECB
president Mario Draghi afterward. The ECB meeting did
produce no change in interest rates. No big policy decisions
were expected after last month’s meeting, in which the ECB
cut its main interest rate to a record low. However, the
market place will parse Draghi’s comments at his press
conference.

So far, this week’s U.S. data economic data has been upbeat
and has fallen into the camp that reckons the Fed will act
to "taper" its monetary policy sooner rather than later.
However, the more critical economic data out this week is
yet to come. This week’s data will provide at least some new
insight on the timing of the Fed’s next move.

U.S. economic data due for release Thursday includes the
weekly jobless claims report, the Challenger job cuts
report, the second-quarter gross domestic product report,
manufacturers’ shipments and orders, and ICSC chain store
sales trends.

Arguably the most important economic report of the week, and
of the month, is Friday’s U.S. Labor Department employment
report for November. The key non-farm payrolls figure of
that report is seen coming in at up around 185,000 jobs.
Given Wednesday’s strong ADP national employment report, in
which the jobs figure was up 215,000, many market watchers
are expecting a stronger Labor Department employment report
on Friday.

Wyckoff’s Daily Risk Rating: 7.0 (The economic report
release pace is strong Thursday and Friday, with markets
likely to react significantly to the data.)

(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. Bulls are fading just a bit. 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 is
above the 18-day moving average. Short-term oscillators
(RSI, slow stochastics) are neutral to bearish early today.
Today, shorter-term technical resistance comes in at
Wednesday’s high of 1,799.30 and then at the record high of
1,812.30. Buy stops likely reside just above those levels.
Downside support for active traders today is located at this
week’s low of 1,778.00 and then at 1,765.00. Sell stops are
likely located just below those levels. Wyckoff's Intra-day
Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher early
today. The shorter-term moving averages (4- 9-and 18-day)
are 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 neutral early today.
Shorter-term technical resistance is located at Wednesday’s
high of 3,494.00 and then at this week’s high of 3,501.25.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
3478.50 and then at this week’s low of 3,453.25. 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. Buy stops
likely reside just above technical resistance at 15,900 and
then at Wednesday’s high of 15,945. Sell stops likely reside
just below technical support at 15,850 and then at
Wednesday’s low of 15,790. Shorter-term moving averages are
neutral early today, as the 4-day moving average is below
the 9-day. The 9-day moving average is above the 18-day
moving average. Shorter-term oscillators (RSI, slow
stochastics) are neutral to bearish early today. Wyckoff's
Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly higher early today,
on tepid short covering. The bears have the overall near-
term technical advantage as prices are in a choppy, six-
week-old downtrend on the daily bar chart. 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 neutral early today. Shorter-term
resistance lies at the overnight high of 129 13/32 and then
at 130 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at this week’s
low of 128 29/32 and then at the September low of 128 11/32.
Sell stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 5.0
 
March U.S. T-Notes: Prices are near steady early today.
Shorter-term moving averages (4- 9- 18-day) are neutral
early today. The 4-day moving average is below the 9-day
and 18-day. The 9-day is above the 18-day moving average.
Oscillators (RSI, slow stochastics) are neutral to bearish
early today. Shorter-term resistance lies at the overnight
high of 123.23.0 and then at 125.00.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at this week’s low of 124.14.0 and then at
124.08.0. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly lower early today
and hit a fresh five-week low overnight. The greenback bears
have the overall near-term technical advantage. Slow
stochastics for the dollar index are bearish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 80.85 and then at 81.00. Shorter-term
support is seen at the overnight low of 80.570 and then at
80.500. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly higher early
today and hit a fresh five-week high overnight. Price action
this week has produced a bullish upside "breakout" on the
daily bar chart, to suggest a market low is in place. A
three-month-old downtrend on the daily bar chart has been
negated. In January Nymex crude, look for buy stops to
reside just above resistance at the overnight high of $97.72
and then at $98.00. Look for sell stops just below technical
support at $97.00 and then at $96.00. Wyckoff's Intra-Day
Market Rating: 6.0

GRAINS

Markets were weaker overnight. Traders are awaiting Thursday
morning’s weekly USDA export sales report. Corn futures
bears are still in technical control, but I don’t expect to
see strong downside price pressure at these lower levels.
Wheat futures have seen the technical posture improve
markedly to the point that I am confident a market low is in
place. Soybean bulls have the near-term technical advantage.
The South American planting and growing season is off to a
good start and that is a bearish factor for corn and
especially soybeans.
 

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