Daily Morning Report

Wednesday, October 26–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are headed for weaker openings when the New York day session begins. The U.S. stock indexes hit five-week highs on Tuesday. Price uptrends on the daily bar charts have been negated and fledgling price uptrends are now in place. Technical evidence is mounting that market bottoms are in place for the U.S. stock indexes. Focus of stock traders this week is on corporate earnings reports.

There were no major market news developments overnight.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are slightly up and trading around $85.75 a barrel. The 10-year U.S. Treasury note is presently yielding 4.067%.

U.S. economic data due for release Wednesday includes the weekly mortgage applications survey, advance economic indicators, new residential sales and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bears still have the overall near-term technical advantage but a fledgling price uptrend is in place on the daily bar chart. 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 this week’s high of 3,874.25 and then at 3,900.00. Support for active traders is seen at Tuesday’s low of 3,790.00 and then at this week’s low of 3,736.50. Wyckoff’s Intra-day Market Rating: 4.0

December Nasdaq index futures: Prices are lower in early U.S. trading. Bears still have the overall near-term technical advantage. A fledgling uptrend is in place on the daily bar chart. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 11,734.00 and then at 12,000.00. On the downside, shorter-term support is seen at this week’s low of 11,207.75 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Monday. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 technical resistance is seen at the overnight high of 121 4/32 and then at 122 even. Shorter-term support lies at the overnight low of 120 1/32 and then at 119 even. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low last week. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 111.01.0 and then at 111.16.0. Shorter-term technical support lies at the overnight low of 110.16.0 and then at 110.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The December Euro currency futures are higher and hit a five-week high in early U.S. trading. Bears still have the overall near-term technical advantage. However, a long-term downtrend on the daily bar chart has been negated and prices are in a fledgling uptrend. 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 1.0087 and then at 1.0150. Shorter-term support is seen at the overnight low of .9983 and then at .9900. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

December Nymex crude oil prices are up a bit in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at last week’s high of $87.14 and then at $89.00. Look for sell stops just below technical support at this week’s low of $82.63 and then at last week’s low of $81.30. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were firmer in overnight trading, on short covering. Corn bulls have the overall near-term technical advantage. Wheat and soybean bears have the chart edge. Grains will continue to look to the outside markets for direction. Seasonal price tendencies for the grains are moving from bearish and more into the bullish camp into the end of the year. 

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

Tuesday, October 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight but Asian shares were mostly down. U.S. stock indexes are headed for weaker openings when the New York day session begins. There are some early technical clues the U.S. stock indexes have put in market bottoms, including near-term price downtrends on the daily charts for the indexes being negated.

Veteran market watchers have taken keen note of Chinese President Xi Jinping’s consolidation of his power at the recently concluded communist party meeting, including having aids drag a former party leader out of the confab meeting who was sitting right next to Xi. Asian stock markets have solid off significantly in the wake of Xi’s power grab. Asian investors reckon Xi will move his second-largest global economy farther away from the West, and in the meantime continue strict Covid lockdowns that will further crimp the Chinese economy.

The Chinese yuan fell 0.6% against the U.S. dollar to CNY7.3084. The currency has now fallen 13% this year and the recent sell-off followed a 7% decline in the Hang Seng index. “Traders are losing faith in China following Xi’s radical shake up at the National Congress. The leader used the meeting to fill the Politburo with loyal hardliners committed to zero Covid and unfriendly market policies,” said broker SP Angel. China’s central bank reacted to the yuan’s weakness by moving the upper limit for cross-border financing, with the aim of boosting foreign capital inflows.

The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are lower and trading around $83.50 a barrel. The 10-year U.S. Treasury note is presently yielding 4.175%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the monthly house price index, the S&P Case-Shiller home indexes, the Richmond Fed business survey and the consumer confidence index.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bears have the overall near-term technical advantage but a two-month-old price downtrend on the daily bar chart has been negated to suggest a market bottom is in place. 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 this week’s high of 3,822.00 and then at 3,850.00. Support for active traders is seen at this week’s low of 3,736.50 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 4.5

December Nasdaq index futures: Prices are slightly lower in early U.S. trading. A two-month-old downtrend on the daily bar chart has been negated, to suggest a market bottom is in place. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 11,530.25 and then at the October high of 11,729.75. On the downside, shorter-term support is seen at this week’s low of 11,207.75 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Monday. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 this week’s high of 120 2/32 and then at 121 even. Shorter-term support lies at the overnight low of 118 5/32 and then at the contract low of 117 19/32. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low last Friday. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 lies at this week’s high of 110.15.0 and then at 111.00.0. Shorter-term technical support lies at the overnight low of 109.20.0 and then at 109.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The December Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a long-term downtrend on the daily bar chart. 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 even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’st high of .9940 and then at 1.0000. Shorter-term support is seen at this week’s low of .9848 and then at .9800. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

December Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages 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 (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 $85.92 and then at last week’s high of $87.14. Look for sell stops just below technical support at this week’s low of $82.63 and then at last week’s low of $81.30. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were lower again in overnight trading. Corn bulls have the slight overall near-term technical advantage. Wheat and soybean bears have the chart edge. Grains will continue to look to the outside markets for direction. Commercial hedge pressure and farmer selling have been squelching corn and soybean bulls, as U.S. harvest of corn and beans is in full swing. However, in the next few weeks harvest will wind down and that will take some seasonal selling pressure off the corn and soybean 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

Monday, October 24–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are pointed to firmer openings when the New York day session begins, following solid gains Friday that came after a Wall Street Journal report suggested the Federal Reserve will slow down the pace of its monetary policy tightening after its November meeting, at which the Fed is expected to raise the Fed funds rate another 0.75%. Stock and financial market bulls are hoping that’s the “Fed pivot” they have been awaiting. There has been scattered talk in the marketplace that certain sectors of financial markets have become strained and much less liquid due to central banks aggressively tightening their monetary policies. It will be another busy week for corporate earnings reports this week.

Asian stock markets sold off as China’s President Xi Jinping tightened his grip on the world’s second-largest economy, following China’s major communist party meeting. It’s likely Xi will continue China’s “zero Covid” policy, which has constrained China’s economy.

The Euro zone got more weak purchasing managers’ data for October. The composite purchasing managers’ index (PMI) for October came in at 47.1 from 48.1 in September. A reading below 50.0 represents contraction in the sector.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $84.25 a barrel. The 10-year U.S. Treasury note is presently yielding 4.177%.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash and services purchasing managers’ indexes.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are firmer and hit a two-week high in early U.S. trading. Bears have the overall near-term technical advantage but a two-month-old price downtrend on the daily bar chart has stalled out. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the October high of 3,819.50 and then at 3,850.00. Support for active traders is seen at the overnight low of 3,736.50 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are slightly higher and hit a two-week high in early U.S. trading. A two-month-old downtrend on the daily bar chart has stalled out. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 11,530.25 and then at 11,750.00. On the downside, shorter-term support is seen at the overnight low of 11,260.75 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Friday. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 Friday’s high of 120 15/32 and then at 122 even. Shorter-term support lies at the overnight low of 118 30/32 and then at the contract low of 118 6/32. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low Friday. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 lies at the overnight high of 110.15.0 and then at 111.00.0. Shorter-term technical support lies at the overnight low of 109.25.0 and then at 109.10.0. 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 in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a long-term downtrend on the daily bar chart. 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 neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of .9940 and then at 1.0000. Shorter-term support is seen at .9800 and then at last week’s low of .9745. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

December Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 the overnight high of $85.85 and then at last week’s high of $87.14. Look for sell stops just below technical support at the overnight low of $82.63 and then at last week’s low of $81.30. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were lower in overnight trading. Corn bulls have the slight overall near-term technical advantage. Wheat and soybean bears have the slight chart edge. Grains will continue to look to the outside markets for direction. Commercial hedge pressure and farmer selling have been squelching corn and soybean bulls, as U.S. harvest of corn and beans is in full swing. However, in the next few weeks harvest will wind down and that will take some seasonal selling pressure off the corn and soybean markets. 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

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

Global stock markets were mixed to lower overnight. U.S. stock indexes are pointed to weaker openings when the New York day session begins. The marketplace late this week is focused on the march higher in U.S. Treasury yields. The U.S. 10-year note yield is presently fetching 4.278%, which is the highest level since 2008. The Federal Reserve is hellbent on taming problematic inflation and is willing to let the U.S. economy stall out to get the job done more quickly. This scenario is bearish for stocks, bonds and commodity markets, but bullish for the U.S. dollar.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are slightly lower and trading around $84.25 a barrel.

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 weaker in early U.S. trading. Bears have the firm overall near-term technical advantage amid a two-month-old price downtrend in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below 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 3,700.00 and then at this week’s high of 3,777.25. Support for active traders is seen at 3,600.00 and then at 3,550.00. Wyckoff’s Intra-day Market Rating: 4.0

December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices remain in a two-month-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 11,200.00 and then at this week’s high of 11,431.75. On the downside, shorter-term support is seen at this week’s low of 10,713.00 and then at 10,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are solidly lower in early U.S. trading and hit another contract low. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 120 15/32 and then at 122 even. Shorter-term support lies at the overnight contract low of 119 7/32 and then at 118 even. Wyckoff’s Intra-Day Market Rating: 3.0

December U.S. T-Notes: Prices are lower and hit a contract low overnight. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 109.15.0 and then at 110.00.0. Shorter-term technical support lies at the overnight contract low of 109.03.5 and then at 109.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5

EURO CURRENCY

The December Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a long-term downtrend on the daily bar chart. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of .9921 and then at 1.0000. Shorter-term support is seen at this week’s low of .9766 and then at .9700. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

December Nymex crude oil prices are slightly higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is even with 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 $87.14 and then at $89.00. Look for sell stops just below technical support at the overnight low of $83.15 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were lower in overnight trading, on some higher risk aversion to end the trading week. Corn bulls have the slight overall near-term technical advantage. Wheat and soybean bears have the slight chart edge. Grains will continue to look to the outside markets for direction. Commercial hedge pressure and farmer selling are squelching corn and soybean bulls at present, as U.S. harvest of corn and beans is in full swing. Wheat appears to be in a follower’s role at present.

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

Thursday, October 20–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to mixed to weaker openings when the New York day session begins. Risk appetite is not robust at present, but neither is risk aversion. Traders and investors are trying to determine if the U.S. stock indexes have put in major market bottoms, or have just seen upside price corrections in downtrends that are still in place on the daily bar charts.

In overnight news, the Japanese yen hit a 32-year low against the U.S. dollar. Japan’s central bank refuses to raise interest rates, while other major central banks are raising rates. There is speculation the Bank of Japan will have to step and sell U.S. dollars to support the yen again.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are higher and trading around $87.00 a barrel. The U.S. Treasury 10-year note yield is presently fetching 4.13%.   

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

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bears still have the firm overall near-term technical advantage amid a two-month-old price downtrend in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below 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 this week’s high of 3,777.25 and then at 3,800.00. Support for active traders is seen at the overnight low of 3,677.00 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 5.0

December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices remain in a two-month-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 11,431.75 and then at the October high of 11,729.75. On the downside, shorter-term support is seen at 11,000.00 and then at this week’s low of 10,713.00. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are near steady in early U.S. trading and hit a contract low overnight. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 technical resistance is seen at 123 15/32 and then at 124 even. Shorter-term support lies at the overnight contract low of 121 6/32 and then at 121 even. Wyckoff’s Intra-Day Market Rating: 4.5

December U.S. T-Notes: Prices are firmer after hitting a contract low overnight. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 110.16.0 and then at 110.24.0. Shorter-term technical support lies at the overnight contract low of 109.19.5 and then at 109.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The December Euro currency futures are firmer in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a long-term downtrend on the daily bar chart. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-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 this week’s high of .9921 and then at 1.0000. Shorter-term support is seen at this week’s low of .9766 and then at .9700. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

November Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $89.00 and then at $90.00. Look for sell stops just below technical support at $85.00 and then at $84.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were higher in overnight trading. Corn bulls have the slight overall near-term technical advantage. Wheat and soybean bears have the slight chart edge. Grains will continue to look to the outside markets for direction. Commercial hedge pressure and farmer selling are squelching corn and soybean bulls at present, as U.S. harvest of corn and beans is in full swing. Wheat appears to be in a follower’s role at present. On tap today is the weekly USDA export sales 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