Daily Morning Report

Wednesday, October 19–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 pointed to near steady openings when the New York day session begins. Risk appetite is more upbeat so far this week. U.S. corporate earnings reports are so far coming in better than expectations despite recession fears.

In overnight news, the Euro zone consumer price index report for September came in at up 9.9%, year-on-year, which was just slightly below market expectations.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $84.00 a barrel. The U.S. Treasury 10-year note yield is presently fetching 4.065%.   

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the weekly DOE liquid energy stocks report and the Federal Reserve’s beige book.

–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 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 Tuesday’s low of 3,697.25 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 5.0

December Nasdaq index futures: Prices are near steady 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 lower in early U.S. trading and near Tuesday’s 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 123 even and then at 124 even. Shorter-term support lies at the contract low of 122 12/32 and then at 122 even. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are solidly lower in early U.S. trading and near the recent 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 resistance lies at the overnight high of 110.29.0 and then at this week’s high of 111.13.0. Shorter-term technical support lies at the contract low of 110.02.0 and then at 109.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are 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 and 18-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

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 early today. Look for buy stops to reside just above technical resistance at $85.00 and then at $86.00. Look for sell stops just below technical support at this week’s low of $82.09 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were mixed in overnight trading. Not much new at mid-week. Corn bulls have the 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

Tuesday, October 18–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins. Risk appetite is keener early this week, due in part to news the new U.K. Chancellor of the Exchequer Jeremy Hunt affirmed Britain will roll back nearly all of its previously announced tax-cut plans that had been roiling financial markets. Stock traders continue to focus on corporate earnings reports, with the companies’ results so far beating expectations despite recession fears.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are slightly up and trading around $85.75 a barrel. The U.S. Treasury 10-year note yield is presently fetching 4.027.  

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, industrial production and capacity utilization, the NAHB housing index and Treasury international capital data.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading, on more short covering. 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. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,764.75 and then at 3,800.00. Support for active traders is seen at the overnight low of 3,706.00 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are solidly higher in early U.S. trading, on more short covering. 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 even with the 9-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 11,363.00 and then at 11,500.00. On the downside, shorter-term support is seen at the overnight low of 11,160.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are slightly lower in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 124 28/32 and then at 125 31/32. Shorter-term support lies at the contract low of 122 28/32 and then at 122 even. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are slightly higher in early U.S. trading. 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 this week’s high of 111.13.0 and then at 111.28.5. Shorter-term technical support lies at the contract low of 110.02.0 and then at 109.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

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 and 18-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 .9918 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: 4.5

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly down in early U.S. trading. Bulls have faded recently. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $87.00 and then at $88.00. Look for sell stops just below technical support at $84.00 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

U.S. grain futures were lower in overnight trading. Corn bulls have the overall near-term technical advantage. Wheat bulls and bears are on a neutral playing field. Soybean futures 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.

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 14–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins, on follow-through strength from Thursday’s strong rebounds and sharply higher closes. Thursday’s reversal price action really surprised the marketplace. The hot U.S. consumer price index report released in the morning dropped the U.S. stock indexes sharply, only to seen them rapidly “turn on a dime.” Analysts scrambled to make sense of the rebounds, with some saying short covering and others saying bargain hunting. Some said there must have been a bullish technical signal, while others, still, reckoned all the bearish news in the marketplace has been factored into prices. It’s likely all of the above were responsible.

U.S. Federal Reserve officials have recently reiterated their aggressively hawkish stance on monetary policy, which has kept the general marketplace uneasy, for fear of pending U.S. and/or global recession. Thursday’s CPI report suggests the Fed is correct regarding its belief that inflation is still not under control.

Risk appetite in the general marketplace has up-ticked a bit on news the U.K. government is going to roll back part of its controversial tax and spending plans that had roiled the financial markets the past two weeks. However, there are now rumblings the U.K. government’s reckless moves have put Prime Minister Truss and the Chancellor of the Exchequer Kwarteng in peril of keeping their jobs—creating still more uncertainty. A Barron’s headline today reads, “The U.K. is heading for crisis….”

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $88.50 a barrel. The U.S. Treasury 10-year note yield is presently fetching 3.901%.  

U.S. economic data due for release Friday includes import and export prices, retail sales, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are firmer in early U.S. trading, on more short covering after strong gains posted on Thursday. Price action Thursday saw a bullish “key reversal” up in prices, which is one clue that a market bottom is in place. Bears still have the solid overall near-term technical advantage amid a seven-week-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 below the 9-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 overnight high of 3,715.50 and then at 3,750.00. Support for active traders is seen at the overnight low of 3,660.25 and then at 3,600.00. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly higher in early U.S. trading, on more short covering. Price action Thursday saw a bullish “key reversal” up in prices, which is one clue that a market bottom is in place. Prices remain in a seven-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-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 11,185.00 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight low of 10,988.25 and then at 10,750.00. 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. Prices are in a nine-week-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 125 28/32 and then at 127 even. Shorter-term support lies at the overnight low of 124 11/32 and then at 123 16/32. Wyckoff’s Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a nine-week-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 resistance lies at this week’s high of 111.28.5 and then at 112.00.0. Shorter-term technical support lies at the overnight low of 110.27.0 and then at 110.19.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The December Euro currency futures are 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 below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of .9855 and then at .9900. Shorter-term support is seen at this week’s low of .9675 and then at .9600. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

November Nymex crude oil prices are lower in early U.S. trading. Bulls have faded this week. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at $91.35. Look for sell stops just below technical support at this week’s low of $85.56 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were mixed to lower in overnight trading. Corn and wheat bulls have the overall near-term technical advantage. Soybean and meal futures bears have the slight chart edge. Grains will continue to look to the outside markets for direction. Keener risk aversion in the marketplace recently has squelched the grain market bulls. 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