Wednesday, January 8--Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The headline risk in the market place picks up Wednesday as
the Federal Reserve’s FOMC minutes are released in the
afternoon. Traders and investors want to see in more detail
why FOMC members decided at their December meeting to begin
scaling back (tapering) the quantitative easing of the Fed’s
monetary policy—and if the FOMC minutes hold any clues for
future Fed actions.
The ADP national employment report is also out Wednesday
morning, which could also impact the markets ahead of
Friday’s key monthly jobs report from the U.S. Labor
Department. The ADP report is seen adding 200,000 jobs in
December, which is what the Labor Department jobs report is
also expected to show on Friday morning.
The European Central Bank and Bank of England hold their
monthly meetings on Thursday. There is also important
economic data coming out of China late this week—trade and
inflation figures.
In overnight news, the European Union reported that its
retail sales pace in November was the best in a dozen years,
at up 1.4% from October and up 1.6% year on year. The
consensus forecast was for just a 0.1% rise. German
manufacturing orders also rose in November. However, this
upbeat data from the Euro zone failed to support the Euro
currency against the other majors.
U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the ADP national
employment report, the weekly DOE liquid energy stocks
report, consumer installment credit and the FOMC minutes.
Wyckoff’s Daily Risk Rating: 7.0 (Today’s U.S. ADP jobs
report and FOMC minutes could move the markets.)
(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 lower in early U.S.
trading, on mild profit taking. 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 early today. Today, shorter-term
technical resistance comes in at this week’s high of
1,834.50 and then at 1,840.50. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at this week’s low of 1,817.50 and then at
1,810.00. 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 Tuesday’s
high of 3,557.25 and then at 3,566.50. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at 3,535.00 and then at 3,525.00. Sell stops
are likely located just below those levels. Wyckoff’s Intra-
Day Market Rating: 5.0.
Dow futures: Prices are slightly lower early today. Buy
stops likely reside just above technical resistance at
Tuesday’s high of 16,492 and then at the record high of
16,535. Sell stops likely reside just below technical
support at Tuesday’s low of 16,425 and then at 16,400.
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 weaker early today. The bears
have the solid overall near-term technical advantage as
prices are in a 10-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
8/32 and then at this week’s high of 129 12/32. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 129 2/32 and
then at Tuesday’s low of 128 29/32. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
4.0
March U.S. T-Notes: Prices are lower early today. Prices
are in a 10-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 123.19.5 and
then at Tuesday’s high of 123.22.0. Buy stops likely reside
just above those levels. Shorter-term technical support
lies at Tuesday’s low of 123.13.0 and then at 123.08.0.
Sell stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is higher early today and hit a
fresh six-week high overnight. The greenback bulls have
gained upside momentum recently. Slow stochastics for the
dollar index are bullish early today. The dollar index finds
shorter-term technical resistance at the overnight high of
81.205 and then at 81.500. Shorter-term support is seen at
the overnight low of 80.980 and then at this week’s low of
80.690. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
February Nymex crude oil prices are firmer early today and
seeing short covering after hitting a five-week low Monday.
Bears still have the overall near-term technical advantage.
A bearish pennant pattern has formed on the daily bar chart.
In February Nymex crude, look for buy stops to reside just
above resistance at this week’s high of $94.59 and then at
$95.00. Look for sell stops just below technical support at
the overnight low of $93.70 and then at this week’s low of
$93.20. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mixed overnight. Trading the next two days is
likely to be quieter in the grains, as traders are awaiting
Friday morning’s USDA quarterly grain stocks report.
Technically, corn, soybean and wheat futures bears are in
near-term control. 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 not so far have wheat growers too worried
about winter kill.
