Wednesday, November 24–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to lower openings when the New York day session begins. It’s a very busy day for U.S. economic data releases Wednesday, including the weekly MBA mortgage applications survey, the second estimate of third-quarter GDP, advance economic indicators, durable goods orders, weekly jobless claims, personal income and outlays, new residential sales, the University of Michigan consumer sentiment survey, the weekly DOE liquid energy stocks report, and the FOMC minutes from the last Fed meeting. Probably the most closely watched figure will be the personal consumption expenditures (PCE) index from the GDP report, which is expected to be up 5.3% from the second quarter. That inflation reading is said to be very closely watched by Federal Reserve officials. A close second is the FOMC minutes.
Rising Covid-19 cases in Europe and Asia continue to prompt risk aversion in the marketplace. Austria is on a virtually complete lockdown and German officials are warning Covid cases are rising at an alarming rate.
Traders are closely watching the Turkish lira this week, which has dropped sharply to a record low against the U.S. dollar. Turkey’s president forced its central bank to lower its main interest rate recently despite rising inflation concerns. That sent the lira into a downward spiral. The lira did rebound a bit Wednesday.
The U.S. Thanksgiving holiday is on Thursday and markets are closed in the U.S.. There is an abbreviated trading session Friday and that’s historically one of the lowest-volume trading days of the year.
The key outside markets today see the U.S. dollar index higher and hitting another 15-month high overnight. Nymex crude oil prices are near steady and trading around $78.50 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.657%.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. The S$P 500 stock index Monday hit a new record high and then backed off to close lower and score a bearish “key reversal” down on the daily bar chart, which is one technical clue that a market top is in place. Still, bulls presently have the solid overall near-term technical advantage as prices are trending up. 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 bearish early today. Today, shorter-term technical resistance comes in at 4,700.00 and then at the contract and record high of 4,740.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,649.00 and then at 4,625.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are weaker in early U.S. trading. The Nasdaq stock index Monday hit a new record high and then backed off to score a bearish “key reversal” down on the daily bar chart, which is one chart clue that a market top is in place. 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 bearish early today. Shorter-term technical resistance is seen at Tuesday’s high of 16,418.75 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 16,118.50 and then at 16,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly up 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 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 the overnight high of 160 even and then at Tuesday’s high of 160 17/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 158 31/32 and then at 158 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up 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 resistance is seen at the overnight high of 130.03.5 and then at 130.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 129.19.0 and then at 129.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading and hit another 16-month low overnight. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1294 and then at 1.1350. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1200 and then at 1.1150. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $79.23 and then at $80.00. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were higher overnight. The wheat futures markets continue hitting multi-year highs. Wheat is propping up the corn and soybean futures markets. The soybean meal futures market is still trending higher, which also signals a market bottom is in place for 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