Wednesday, September 11–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly up overnight. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins. Generally, there remains low risk aversion in the world marketplace at mid-week. China has made a positive overture to the U.S. regarding trade when it said it will exempt certain U.S. products from tariffs for one year. This week the U.S.-China trade tensions have appeared to ratchet down a notch.
Focus is turning to the monetary policy meeting of the European Central Bank on Thursday, at which time the ECB is expected to only very slightly cut interest rates, pushing them further into negative territory. The Federal Reserve meets next week and is expected to cut U.S. interest rates by 0.25%.
The key “outside markets” today see Nymex crude oil prices higher and trading around $58.00 a barrel. Thursday sees a meeting of the OPEC oil cartel. Oil prices have rallied recently on ideas OPEC nations will continue to constrict their spigots. OPEC today cut its world oil demand growth forecast to 1.02 million barrels per day for 2019. The U.S. dollar index is higher in early U.S. trading today.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, monthly wholesale trade and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 2,993.00 and then at 3,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,967.25 and then at 2,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls have the firm overall technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,866.75 and then at last week’s high of 7,912.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,801.50 and then at 7,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower and hit a four-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading and need to show fresh power soon. A price uptrend on the daily chart has been negated. 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 early today. Shorter-term technical resistance is seen at 162 even and then at 163 2/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 160 18/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower and hit a five-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are now fading. 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 support lies at the overnight low of 129.26.0 and then at 129.20.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 130.08.0 and then at 130.16.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 98.225 and then at 98.490. Shorter-term support is seen at the overnight low of 97.830 and then at this week’s low of 97.665. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bull have the overall near-term technical advantage as prices are in a five-week-old uptrend on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $58.30 and then at this week’s high of $58.76. Look for sell stops just below technical support at Tuesday’s low of $57.20 and then at this week’s low of $56.58. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were slightly down in overnight trading. Corn was down around 1 cent, soybeans down about 2 cents and wheat off around 3 cents. Selling interest has been somewhat squelched at mid-week as traders are encouraged by positive U.S.-China trade developments this week. There were upbeat comments coming from U.S. Treasury Secretary Mnuchin on Monday and Tuesday. And today China said it would hold off for one year putting tariffs on some U.S. products. Reports from China also said the nation wants to buy more U.S. agricultural products.
The data point of the week for the US grain markets is Thursday’s monthly USDA supply and demand report, including new government estimates of the size of the US crops. Look for quieter trading today, heading into that report.
Weather in the US Midwest remains warm, rainy and non-threatening, including no signs of an early hard frost that would kill the still-maturing corn and soybean crops.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff