Friday, November 15–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward modestly higher openings and at new record highs when the New York day session begins. Trader and investor risk appetite is a bit more robust to end the trading week. It’s been another up-and-down week regarding progress, or lack thereof, in U.S.-China trade negotiations. A Barron’s headline Friday warned that investors should be less worried about U.S.-China trade talks and more concerned about recent data pointing to a significant slowdown in China’s economic growth.
Hong Kong reported its gross domestic product down 2.9% in the third quarter, from the same period last year. The city expects its GDP to decline by 1.3% in 2019—the first annual decline in 10 years. Civil unrest in the city much of this year has hurt Hong Kong’s economic growth, as well as rattled Asian stock markets.
In other overnight news Friday, the Eurozone October consumer price index rose 0.1% from September and was up 0.7%, year-on-year.
The key “outside markets” today see the U.S. dollar index slightly lower. Nymex crude oil prices are weaker and trading around $56.50 a barrel.
It’s a very busy Friday for U.S. economic data released, including the Empire State manufacturing survey, retail sales, import and export prices, industrial production and capacity utilization, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer and hit a 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 3,111.50 and then at 3,125.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 3,075.75 and then at 3,063.00. 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 a 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 8,308.50 and then at 8,350.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 8,261.25 and then at 8,200.00. 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 weaker in early U.S. trading, on a corrective pullback from good gains scored this week. Bulls have stabilized the market this week, 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 early today. Shorter-term technical resistance is seen at the overnight high of 158 17/32 and then at this week’s high of 158 30/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 29/32 and then at Thursday’s low of 157 7/32. 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, on a corrective pullback from this week’s gains. Prices are in a five-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 support lies at the overnight low of 129.00.5 and then at Thursday’s low of 128.22.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 129.10.0 and then at this week’s high of 129.15.0. 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 slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day. The 9-day is above with the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 98.300 and then at 98.500. Shorter-term support is seen at 97.800 and then at 97.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower in early U.S. trading. Prices are in a five-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 $57.12 and then at the November high of $57.88. Look for sell stops just below technical support at this week’s low of $56.20 and then at $55.76. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures prices were mixed to weaker overnight, with corn near steady, soybeans down around 1/2 cent and wheat around 2 cents down. It’s been another up-and-down week for grain traders regarding progress, or lack thereof, in U.S.-China trade negotiations. A Barron’s headline Friday warned that traders should be less worried about U.S.-China trade talks and more concerned about recent data pointing to a significant slowdown in China’s economic growth. The highlight of the day Friday will be the weekly USDA export sales report, delayed by one day due to the U.S. holiday on Monday. US corn sales are seen at 400,000 to 800,000 metric tons (MT), soybeans 800,000 to 1,400,000 MT and wheat at 200,000 to 500,000 MT. Traders will be watching the data for stepped-up grain purchases from China. The near-term technical chart postures for all three grain markets have deteriorated the past few weeks, which is prompting some fresh selling interest from speculators, including the big “funds.” The Midwest US weather is now a mixed bag for the futures market. It has been colder and snowy this week, which has is delayed harvesting of corn and soybeans still in the fields. However, the coming days see warmer and drier weather conditions in the regions, to allow for good progress on gathering the 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