Friday, November 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were sharply lower in overnight trading. The U.S. stock indexes are pointed to solidly lower openings when the New York day session begins. There is keen risk aversion in the marketplace Friday, on what typically is a very quiet post-U.S.-Thanksgiving-holiday trading day that sees many U.S. markets closing early. A new strain of Covid-19 that is rapidly spreading in southern Africa has produced high anxiety among traders and investors. The European Union and the U.K. are moving to halt air travel from South Africa. Other governments are also moving quickly to try to control the spread of the new strain of coronavirus. Scientists have not determined how quickly the new strain can spread or whether it is resistant to existing Covid vaccines. The World Health Organization is holding an emergency meeting on the matter Friday.
Nymex crude oil prices have plunged to a nearly two-month low of $72.60 a barrel, U.S. Treasury bond and note prices are soaring (yields dropping) on the news. The yield on the U.S. Treasury 10-year note is presently fetching 1.521%, well down from 1.64% seen on Wednesday. Gold prices are sharply higher on safe-haven demand. The other key outside market today sees the U.S. dollar index solidly lower. Bitcoin prices are sharply down and have lost over 7% Friday.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are solidly lower and hit a nearly four-week low in early U.S. trading. A near-term price uptrend on the daily bar chart has been negated to also suggest that a near-term market top is in place. 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 4,650.00 and then at 4,675.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,597.00 and then at 4,575.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 3.0
December Nasdaq index futures: Prices are lower 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 neutral early today. The 4-day moving average is below 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 the overnight high of 16,436.00 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 16,102.00 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 sharply up in early U.S. trading, on flight-to-quality buying. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 162 21/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at 161 even and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
December U.S. T-Notes: Prices are sharply higher 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 bullish early today. Shorter-term resistance is seen at the overnight high of 131.06.0 and then at 131.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.20.0 and then at 130.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
EURO CURRENCY
The December Euro currency futures are higher in early U.S. trading on short covering after hitting a 16-month low Wednesday. Bears still 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 bullish early today. The Euro currency finds shorter-term technical resistance at 1.1300 and then at 1.1350. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1190 and then at 1.1150. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply down and hit a nearly two-month low 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 bearish early today. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at the overnight low of $72.60 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
U.S. grain futures did not trade overnight due to the Thanksgiving holiday. However, the keen risk aversion in the marketplace Friday is likely to put pressure on grain futures prices. On tap today is the weekly USDA export sales report. Surging wheat prices are propping up the corn and soybean futures markets.
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