Jim's Morning Markets Report--Jan. 6

January 6, 2014 12:32 AM
 

Monday, January 6--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

For many traders and investors, this is their first day back
at work after a long holiday break. Later this week the
headline risk picks up, as the Federal Reserve’s FOMC
minutes are out Wednesday afternoon, while the European
Central Bank holds its monthly meeting on Thursday and the
U.S. employment report is out on Friday.

There is also important economic data coming out of China
later this week, including trade and inflation reports. Last
week, a disappointing purchasing managers index in China was
reported, which has helped to sink the Chinese stock market
the past few sessions. The spike in short-term Chinese
interest rates in late December is still on traders’ minds.
China remains an increasingly important cog in the
collective world economy.

U.S. economic data due for release Monday includes
manufacturers’ shipments and orders, the ISM non-
manufacturing report, and the global services purchasing
managers index.

Wyckoff’s Daily Risk Rating: 5.0 (No major headline risk
today, but the heat will be turned up as the week
progresses.)

(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 slightly higher in early U.S.
trading. 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 Friday’s high of 1,832.50
and then at 1,840.50. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at Friday’s low of 1,821.00 and then at 1,810.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly 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 to bearish
early today. Shorter-term technical resistance is located at
the overnight high of 3,540.25 and then at 3,550.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
3,527.00 and then at 3,500.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
5.5.

Dow futures: Prices are slightly higher early today. Buy
stops likely reside just above technical resistance at
Friday’s high of 16,450 and then at 16,500. Sell stops
likely reside just below technical support at 16,400 and
then at Friday’s low of 16,375. Shorter-term moving averages
are still bullish early today, as the 4-day moving average
is above the 9-day and 18-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: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today on short
covering in a bear market. The bears still have the solid
overall near-term technical advantage as prices are in a
nine-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 bullish early today. Shorter-term
resistance lies at the overnight high of 128 26/32 and then
at 129 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 128 8/32 and then at 128 1/32. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5
 
March U.S. T-Notes: Prices are slightly higher early today
and hovering near the recent 3.5-month low. Prices are in a
nine-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 bullish early today. Shorter-term
resistance lies at last week’s high of 123.12.5 and then at
123.17.5. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
122.30.0 and then at the December low of 122.24.5. 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 higher early today
and hit a four-week high overnight. The greenback bulls have
gained upside momentum. Slow stochastics for the dollar
index are bullish early today. The dollar index finds
shorter-term technical resistance at the overnight high of
81.080 and then at the December high of 80.185. Shorter-term
support is seen at the overnight low of 80.880 and then at
Friday’s low of 80.640. Wyckoff's Intra Day Market Rating:
5.5

NYMEX CRUDE OIL

February Nymex crude oil prices are firmer early today and
seeing a corrective bounce after dropping sharply and
hitting a four-week low on Friday. Bears have regained the
overall near-term technical advantage. In February Nymex
crude, look for buy stops to reside just above resistance at
the overnight high of $94.59 and then at $95.00. Look for
sell stops just below technical support at $94.00 and then
at last week’s low of $93.86. Wyckoff's Intra-Day Market
Rating: 5.5

GRAINS

Markets were firmer overnight on a short covering bounce
following recent selling pressure. Technically, corn and
wheat futures bears are still in full control with prices
not far above their recent contract lows. Soybean bulls have
faded badly recently, too. Corn and soybean traders will
continue to keep an eye on South American weather, which so
far has not been significantly worrisome for the crops. An
arctic blast in the U.S. does have some wheat growers
worried about winter kill, and that will limit selling
pressure in the wheat futures markets. Traders will closely
examine Monday morning’s weekly USDA grain export
inspections data.
 

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