Tuesday, November 19–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes mixed overnight. U.S. stock indexes are pointed toward firmer openings and new record highs when the New York day session begins.
Focus of traders and investors is turning more to the civil unrest in Hong Kong, which is becoming more widespread and violent, and is bearish for Asian stock markets. Also, it appears mainland China government officials and Hong Kong officials are becoming more at odds on dealing with the protesting. Hong Kong has been a major business hub for years, but the protests in the streets are making the world’s businesses leery of dealing in Hong Kong.
In other overnight news, China’s central bank slightly lowered its short-term repo rate Tuesday, and the People’s Bank of China governor said he will continue to work to lower real lending rates, as the government continues to work to stem the negative economic effects of its trade war with the U.S.
More details emerged overnight regarding President Trump’s meeting with Fed Chairman Powell on Monday morning. Trump late Monday tweeted that he told Powell U.S. interest rates are too high and that U.S. rates should be “lower than all others.” Trump in his tweet also said the U.S. dollar is too strong.
The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $56.50 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer and hit another new contract and record high in early U.S. trading. Bulls have the solid 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 3,132.50 and then at 3,150.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 3,111.00 and then at 3,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are firmer and hit another new contract and record high in early U.S. trading. Bulls have the solid near-term 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 8,379.00 and then at 8,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 8,317.25 and then at Monday’s low of 8,279.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly weaker in early U.S. trading. Bulls have stabilized the market, but prices are still in a downtrend on the daily bar chart market. 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 to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 159 3/32 and then at 159 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 157 28/32 and then at 157 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are slightly weaker in early U.S. trading. Prices are in a six-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 to bullish early today. Shorter-term support lies at Monday’s low of 128.31.0 and then at 128.22.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the Monday’s high of 129.14.5 and then at 129.20.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded a bit recently. 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 with 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 Monday’s high of 97.870 and then at last week’s high of 98.300. Shorter-term support is seen at Monday’s low of 97.550 and then at 97.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are lower in early U.S. trading. Prices are in a six-week-old uptrend on the daily bar chart. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $57.11 and then at Monday’s high of $58.09. Look for sell stops just below technical support at $56.20 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were firmer overnight, with corn 1 1/4 cents higher, soybeans up around 2 cents and wheat up 3/4 cents. The weekly USDA crop progress report out Monday afternoon showed US corn harvest at 76% complete versus 77% expected and 66% done last week. US soybean harvest was at 91% complete, as expected, compared to 85% done last week. Winter wheat planting was 95% complete, as expected, versus 92% last week. US Midwest weather leans a bit bullish for the futures markets as the expected drier weather that was expected in the coming days is actually seeing some light rains in the Corn Belt early this week, which will further hamper harvest progress. The U.S.-China trade negotiations progress at present has grain traders numb and waiting for actual Chinese purchases to be reported by USDA before getting too excited. The near-term technical chart postures for all three grain markets favors the bears as all three grains are in near-term price downtrends on the daily bar charts.
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