Friday, September 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. It’s been a choppy week for the U.S. stock market. After some risk aversion exhibited earlier this week, traders and investors appear to be more upbeat to end the trading week.
In overnight news, Dow Jones Newswires reported the Federal Reserve will likely begin to gradually taper its $120 billion a month bond-buying program (quantitative easing) in November.
Reports said Deutsche Bank AG has joined other investment banks in urging caution on investors continuing to load up on U.S. stocks. The Nasdaq and S&P 500 stock indexes have recently hit record highs. The investment bank warned there is increased risk of an equity market correction as stock valuations have risen to around 21 times earnings.
The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil futures prices are higher and trading around $69.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.312%.
U.S. President Biden and Chinese leader Xi Jinping had a lengthy telephone conversation Thursday in an effort to ease tensions between the world’s two largest economies. The marketplace is reading that as a positive development.
U.S. economic data due for release Friday includes the producer price index and monthly wholesale trade. There is also an important USDA supply and demand report for grains.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading and not far below last week’s contract and record high. Bulls have the firm overall near-term technical advantage. Prices are still in a longer-term uptrend on the charts. 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 the contract high of 4,539.50 and then at 4,565.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,476.25 and then at 4,450.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are a firmer in early U.S. trading. Bulls have the solid chart advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 contract high of 15,702.25 and then at 15,800.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 15,515.00 and then at last week’s low of 15,409.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. 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 technical resistance is seen at the overnight high of 163 19/32 and then at this week’s high of 163 27/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 162 13/32 and then at 162 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 in early U.S. trading. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 133.16.0 and then at this week’s high of 133.19.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 133.04.0 and then at 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears still have the overall near-term technical advantage but bulls are still working on a fledgling price uptrend on the daily chart. The shorter-term moving averages for the Euro 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 Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1873 and then at 1.1900. Buy stops likely reside just above those levels. Shorter-term support is seen at the September low of 1.1808 and then at 1.1775. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $70.00 and then at $71.00. Look for sell stops just below technical support at $68.00 and then at this week’s low of $67.56. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were a bit firmer overnight. The major report of the week, if not the month, for the grain markets is Friday morning’s USDA supply and demand report. Look for higher volatility in the immediate aftermath of the noon EDT report. Weekly USDA grain export sales data is also out Friday morning. The corn and soybean market bears have the overall near-term technical advantage and the wheat bulls are fading, too. Technical damage has been inflicted in corn, wheat and soybeans recently, to suggest the path of least resistance for those markets will be sideways to lower in the near term. Seasonal weakness is also a negative for the grains, amid the just-completed U.S. wheat harvest and the soon-to-begin soybean and corn harvests.
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