Daily Morning Report

Thursday, October 22–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight, with Asian shares mostly weaker and European shares mostly firmer. U.S. stock indexes are set to open the New York day session weaker. Risk appetite among traders and investors has waned recently. Covid-19 stimulus package discussions between congressional Democrats and Republicans continue, even after House Speaker Pelosi’s stated deadline for a deal has passed. The window is rapidly closing on any deal reached and implemented before the U.S. election in early November.

Reports say Goldman Sachs is forecasting a commodity market bull run stoked by inflation and new demand driven by additional fiscal and monetary stimulus by the world’s major economies. Goldman also reportedly forecast a return of 28% over the next 12 months on their commodity index, though the firm said individual commodities are likely to perform much better. This news comes as today it was announced Goldman was fined $350 million by Hong Kong securities and futures regulators over “serious lapses and deficiencies.” So, Goldman’s bull market forecast for commodities makes many veteran market watchers wonder if the firm just “talking their book.”

The important outside markets early today see the U.S. dollar index higher on a corrective bounce after hitting a six-week low Wednesday. Nymex crude oil prices are higher and trading around $40.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.81% today.

U.S. economic data due for release Thursday includes the weekly jobless claims report, existing home sales, leading economic indicators, and the Kansas City Fed manufacturing survey.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage but have faded recently. 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 to bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 3,458.00 and then at this week’s high of 3,496.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,402.50 and then at 3,380.00. Wyckoff’s Intra-day Market Rating: 4.5

December Nasdaq index futures: Prices are slightly lower in early U.S. trading. 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 neutral to bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 11,779.25 and then at this week’s high of 11,950.50. On the downside, shorter-term support is seen at this week’s low of 11,585.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are firmer on short covering after hitting a 4.5-month low on Wednesday. Bulls are fading. 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 technical resistance is seen at Wednesday’s high of 173 24/32 and then at 174 even. Shorter-term support lies at the overnight low of 172 29/32 and then at this week’s low of 172 17/32. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering after hitting a four-month low Wednesday. Bulls are fading. 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 lies at Wednesday’s high of 138.24.5 and then at Tuesday’s high of 138.28.5. Shorter-term technical support lies at this week’s low of 138.13.0 and then at 138.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The December Euro currency futures are weaker on a corrective pullback after hitting a four-week high on Wednesday. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1879 and then at this week’s high of 1.1894. Shorter-term support is seen at 1.1800 and then at 1.1773. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

December Nymex crude oil prices are firmer in early U.S. trading. Trading remains choppy. 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 neutral early today. Look for buy stops to reside just above technical resistance at $41.00 and then at this week’s high of $41.90. Look for sell stops just below technical support at $39.36 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

US grain futures are mixed in early U.S. pre-market trading. On tap today is the weekly USDA export sales report. Traders want to see if China continues snapping up U.S. grains. Grain market bulls remain in solid technical control. Bullish speculators continue to enter the grain futures markets as the charts are fully bullish. There are no early clues to suggest that market tops are close at hand. The path of least resistance for prices remains sideways to higher.     

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

Wednesday, October 21–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session narrowly mixed. It now appears less likely the U.S. Congress and the Trump administration can come to agreement on a new Covid-19 stimulus package before the U.S. elections in less than two weeks. All sides are still in communication regarding getting some kind of a stimulus package for Americans, however. The U.S. Senate Republicans could stymie any deal that is agreed upon by the House and the Trump administration. Corporate earnings reports are also in focus at present.

Rising Covid-19 cases in the U.S., Europe and South America continue to dampen trader and investor enthusiasm at mid-week. Drug makers are rushing for a successful vaccine, but none appear ready for public consumption any time soon.

In other news, China recently eased its rules on banks trading in the China currency, the yuan, allowing the currency to strengthen. Reports say China is promoting the yuan as the new world reserve currency. The yuan today rose nearly 0.5% to its strongest level against the U.S. dollar since July of 2018. China continues to recover more rapidly from Covid-19 as the U.S. and Europe see rising cases. The Yuan has strengthened more than 7% against the greenback since late May. “In addition to dollar weakness, the yuan is being underpinned by a wide interest-rate premium over the rest of the world. China’s 10-year government bond yields are around 3.2% as the gap versus the yield on U.S. Treasuries hovers around the highest on record,” said an SP Angel email dispatch this morning.

The important outside markets early today see the U.S. dollar index lower again and hitting a six-week low. Nymex crude oil prices are lower and trading around $41.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.8% today.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book. Several Federal Reserve officials also are slated to speak today. 

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage but have faded a bit recently. 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 to bearish early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 3,469.75 and then at this week’s high of 3,496.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,410.75 and then at 3,380.00. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly higher in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 11,792.00 and then at this week’s high of 11,950.50. On the downside, shorter-term support is seen at the overnight low of 11,585.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are lower and hit a 4.5-month low in early U.S. trading. Bulls are fading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 173 24/32 and then at 174 even. Shorter-term support lies at the overnight low of 172 17/32 and then at 172 even. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are lower and hit a four-month low 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 bearish early today. Shorter-term resistance lies at the overnight high of 138.24.5 and then at Tuesday’s high of 138.28.5. Shorter-term technical support lies at the overnight low of 138.13.0 and then at 138.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are higher and hit a four-week high in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1884 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1834 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

December Nymex crude oil prices are weaker in early U.S. trading. Bulls are working on a near-term price uptrend. 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $41.90 and then at $42.02. Look for sell stops just below technical support at $40.00 and then at $39.36. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

US grain futures are higher again in early U.S. pre-market trading. Grain market bulls remain in solid technical control. Bullish speculators continue to enter the grain futures markets as the charts are fully bullish. There are no early clues to suggest that market tops are close at hand. The path of least resistance for prices remains sideways to higher.     

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

Global stock markets were mixed to firmer overnight. U.S. stock indexes are set to open the New York day session higher on hopes the U.S. Congress and the Trump administration can come to agreement on a new Covid-19 stimulus package. House Speaker Pelosi set a deadline for today on getting a deal completed. Now, some in the marketplace sense a deal could be reached by the end of today. Others remain doubtful. Corporate earnings reports are also in focus at present.

Meantime, trader and investor risk appetite is being squelched by the Covid news that is getting worse every day. Infections are rising in Europe, the U.S. and South America. No vaccine coming to the public is in sight. However, there is a consensus in the marketplace that there will not be the near-complete lockdowns of businesses and economies that were seen in the spring, even if the Covid situation gets worse, which many expect it will as winter approaches in the northern hemisphere.

The important outside markets early today see the U.S. dollar index lower again. Nymex crude oil prices are near steady and trading around $40.80 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.78% today.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. 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 Monday’s high of 3,496.50 and then at 3,524.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,428.25 and then at Monday’s low of 3,410.75. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are higher in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 11,950.50 and then at 12,100.00. On the downside, shorter-term support is seen at the overnight low of 11,667.00 and then at Monday’s low of 11,591.25. 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. Bulls are fading again. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 174 14/32 and then at Monday’s high of 174 27/32. Shorter-term support lies at the overnight low of 173 30/32 and then at the October low of 173 10/32. 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 bearish early today. Shorter-term resistance lies at the October low of 138.20.5 and then at 138.16.0. Shorter-term technical support lies at the October low of 138.20.5 and then at 138.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are higher in early U.S. trading. 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  bullish early today. The Euro currency finds shorter-term technical resistance at the October high of 1.1847 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1773 and then at Monday’s low of 1.1717. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

November Nymex crude oil prices are a bit higher in early U.S. trading. Price action has turned choppy and sideways. 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $41.29 and then at the October high of $41.47. Look for sell stops just below technical support at the overnight low of $40.48 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

US grain futures are higher again in early U.S. pre-market trading. Grain market bulls remain in solid technical control. Bullish speculators continue to enter the grain futures markets as the charts are fully bullish. There are no early clues to suggest that market tops are close at hand.     

Monday, October 19–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session higher. Trader and investor risk appetite is more upbeat to start the trading week, on renewed hopes for an agreement between U.S. congressional Democrats and Republicans on a stimulus package for Americans. House Speaker Nancy Pelosi over the weekend set a Tuesday deadline for an agreement with the White House. President Trump said he is closer to Democrats’ demandsfor a larger overall package than congressional Republicans. The Senate Wednesday plans to vote again on a $500 billion coronavirus aid package.

There was also upbeat economic data coming out of China, as its economy in the third quarter grew by 4.9%, which was slower than expected but still considered a good recovery from the business lockdowns experienced earlier in the year. China remains the fastest-recovering major economy, after the lockdowns.

Reports said new legislation passed Saturday enables the Chinese government to restrict rare earth mineral exports to foreign companies and nations. China had already been using access to rare earth minerals and other materials to persuade companies to set up manufacturing in China. However, the passing of official legislation on the matter marks an escalation of the strategy to control critical commodity markets and gain the upper hand on Western manufacturing. The legislation also applies to advanced technologies required by manufacturers such as LEDs, where China dominates global supply. The new law takes effect December 1.

The important outside markets early today see the U.S. dollar index lower. Nymex crude oil prices are modestly lower and trading around $40.60 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.78% today.

U.S. economic data due for release Monday is light and includes the NAHB housing market index. Fed Chairman Powell also speaks today at an International Monetary Fund forum.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The 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 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 Friday’s high of 3,508.50 and then at 3,524.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Friday’s low of 3,461.25 and then at last week’s low of 3,431.50. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are higher 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 neutral early today. Shorter-term technical resistance is seen at Friday’s high of 12,022.00 and then at 12,100.00. On the downside, shorter-term support is seen at the overnight low of 11,816.75 and then at last week’s low of 11,687.75. Wyckoff’s Intra-Day Market Rating: 6.5.

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 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 174 27/32 and then at 175 even. Shorter-term support lies at 174 even and then at the October low of 173 11/32. 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 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 to bearish early today. Shorter-term resistance lies at 139.00.0 and then at 139.07.5. Shorter-term technical support lies at the overnight low of the October low of 138.22.5 and then at 138.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are higher in early U.S. trading. 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 bullish early today. The Euro currency finds shorter-term technical resistance at 1.1800 and then at the October high of 1.1847. Shorter-term support is seen at 1.1750 and then at last week’s low of 1.1702. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

November Nymex crude oil prices are a bit weaker in early U.S. trading. Price action has turned choppy and sideways. 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $41.29 and then at the October high of $41.47. Look for sell stops just below technical support at $40.00 and then at last week’s low of $39.04. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

US grain futures are higher in early U.S. pre-market trading. Grain market bulls remain in solid technical control. Bullish speculators continue to be lured into the grain futures markets. There are no early clues to suggest that market tops are close at hand. On tap today is the weekly USDA export inspections report.    

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