Tuesday, October 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins.
Still near the front burner of the marketplace is the global supplies shortage and transportation bottlenecks that have many of those supplies’ prices rising, including energy. Many industrial metals prices are soaring, including copper, aluminum and magnesium. Nymex crude oil prices are higher and hit a seven-year high of $83.58 a barrel overnight. Natural gas prices are also at very elevated levels. As winter approaches in the Northern Hemisphere, amid the rising energy costs and worries in some countries about securing winter heating needs, it seems “Murphy’s law” will almost certainly come into play: a much harsher-than-normal winter for many countries in the Northern Hemisphere.
The other key outside market today sees the U.S. dollar index solidly lower. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.597%. For perspective, the U.K. 10-year gilt yield is presently 1.135% and the German 10-year bund yield is at -0.144%.
U.S. economic data due for release Tuesday includes the weekly chain store and Johnson Redbook retail reports, and new residential construction.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit a five-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices are trending up again. 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 bullish early today. Today, shorter-term technical resistance comes in at 4,525.00 and then at the record high of 4,539.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,471.75 and then at this week’s low of 4,436.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are higher and hit a three-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at 15,400.00 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,200.00 and then at this week’s low of 15,038.75. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
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 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 technical resistance is seen at the overnight high of 159 25/32 and then at 160 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 158 21/32 and then at 158 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are a bit 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 bullish early today. Shorter-term resistance is seen at the overnight high of 130.31.0 and then at 131.06.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.20.5 and then at this week’s low of 130.14.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are higher and hit a three-week high in early U.S. trading. Bears have the overall near-term technical advantage. However, a six-week-old price downtrend on the daily bar chart has been negated, to suggest a market bottom is in place. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at 1.1700 and then at 1.1750. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1620 and then at this week’s low of 1.1584. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a seven-year high in early U.S. trading. Bulls have the solid near-term technical advantage. 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 in December futures at this week’s high of $83.18 and then at $84.00. Look for sell stops just below technical support at $82.00 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures were higher overnight. Bullish outside markets on this day—higher crude oil prices and a lower U.S. dollar index—are supporting the grains Tuesday. Corn and soybean bears have the near-term technical advantage. Wheat bulls remain in technical command. Harvesting of the U.S. corn and soybean crops is in full swing and that’s still bearish and will also keep gains limited in corn and soybeans.
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