Daily Morning Report

Tuesday, October 11–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins. Dour comments on the global economic/political outlook from the respected chief of JP Morgan, Jamie Dimon, as well as an escalation in the Russia-Ukraine war, are keeping a “risk-off” trader and investor mentality in the general marketplace.

It appears the safe-haven assets of choice at present are the U.S. dollar and U.S. Treasuries. The greenback has been appreciating and U.S. bond yields have been rising. Meantime, the price of gold, which is also considered a safe-haven store of value, has been falling.

The U.K. government bond market is still roiled, as the Bank of England was forced to stepped in to buy inflation-linked bonds to its bond-buying program. There are worries U.K. pension funds could be lost in any more serious U.K. bond market rout.

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $89.00 a barrel. The U.S. Treasury 10-year note yield is presently fetching 3.956%.  

Traders are looking ahead to key U.S. inflation reports on Wednesday and Thursday mornings. The producer price index report for September is out Wednesday and the consumer price index report for September is out Thursday. The consumer price index is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the NFIB small business index, and the IDB/TIPP economic optimism index.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bears 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 bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,636.00 and then at this week’s high of 3,667.50. Support for active traders is seen at the October low of 3,571.75 and then at 3,525.00. Wyckoff’s Intra-day Market Rating: 4.0

December Nasdaq index futures: Prices are slightly down and hit a contract low in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 11,136.50 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight contract low of 10,853.25 and then at 10,600.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are firmer 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 early today. Shorter-term technical resistance is seen at Monday’s high of 125 26/32 and then at 126 even. Shorter-term support lies at Monday’s contract low of 123 21/32 and then at 123 even. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are firmer 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 bearish early today. Shorter-term resistance lies at Monday’s high of 111.21.5 and then at 112.00.0. Shorter-term technical support lies at the contract low of 110.19.0 and then at 110.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The December Euro currency futures are slightly up in early U.S. trading. Bears still 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 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of .9803 and then at last Friday’s high of .9867. Shorter-term support is seen at the overnight low of .9718 and then at .9650. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

November Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $91.35 and then at this week’s high of $93.64. Look for sell stops just below technical support at $87.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were weaker in overnight trading, on corrective pullbacks from Monday’s gains and amid keener risk aversion in the general marketplace. Corn and wheat bulls have the firm 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. 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

Monday, October 10–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. U.S. government offices and many banks are closed Monday for the Columbus Day national holiday. Stock market traders will focus on a barrage of corporate earnings reports out this week.

Risk aversion is still elevated to start the trading week. The Russia-Ukraine war has escalated as Russia launched missiles into several Ukrainian cities after a strategic bridge for Russia in the Crimea region suffered major damage from explosions, with Ukraine’s military likely the culprit. Meantime, North Korea has test-fired ballistic missiles to provoke the West in an already-tense global geopolitical environment.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $92.00 a barrel. The U.S. Treasury cash market is closed Monday for the holiday.  

U.S. economic data due for release Monday is light and includes the employment trends index. Traders are looking ahead to a key U.S. inflation report on Thursday morning, the consumer price index report for September, which is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage amid a seven-week-old price downtrend still 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at 3,700.00 and then at 3,750.00. Support for active traders is seen at the overnight low of 3,618.00 and then at the October low of 3,571.75. Wyckoff’s Intra-day Market Rating: 4.5

December Nasdaq index futures: Prices are slightly down in early U.S. trading. Prices remain in a seven-week-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 neutral to bearish early today. Shorter-term technical resistance is seen at 11,200.00 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight low of 10,986.00 and then at the October low of 10,890.75. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are weaker 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 bearish early today. Shorter-term technical resistance is seen at Friday’s high of 126 13/32 and then at 127 even. Shorter-term support lies at 125 even and then at the contract low of 123 30/32. Wyckoff’s Intra-Day Market Rating: 4.5

December U.S. T-Notes: Prices are slightly lower 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 bearish early today. Shorter-term resistance lies at Friday’s high of 111.31.0 and then at 112.16.0. Shorter-term technical support lies at last week’s low of 111.06.0 and then at 111.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

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 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of .9803 and then at Friday’s high of .9867. Shorter-term support is seen at .9700 and then at .9650. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

November Nymex crude oil prices are weaker in early U.S. trading after hitting a five-week high overnight. Bulls have momentum. The shorter-term moving averages are bullish early today as the 4-day is above 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 the overnight high of $93.55 and then at $95.00. Look for sell stops just below technical support at $91.00 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

U.S. grain futures were sharply higher, as the Russia-Ukraine war has escalated, meaning a Ukraine grain-shipping agreement between the two countries is in serious jeopardy. Ukraine is a major world grain producer. 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.  

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 6–Jim Wyckoff’s Morning Markets Report

Global stock markets were flat to weaker overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins, still on corrective pullbacks after solid gains posted on Monday and Tuesday that were the largest two-day advance in over two years.

Early this week there were some notions in the marketplace that the Federal Reserve could ease up on its aggressive monetary policy tightening. However, stronger U.S. economic data this week and still-hawkish comments from Fed officials have pretty much dashed those notions. One analyst said it’s a misconception to believe the Fed will start to ease as soon as the U.S. economy shows deterioration. He suggested the Fed will have to remain restrictive until inflation starts to drop significantly.

The key outside markets today see the U.S. dollar index higher. The USDX has made a strong rebound from solid early week selling pressure. Broker SP Angel said this morning in an email dispatch: Is the Fed purely combatting inflation by rising interest rates? Personally, we reckon the Fed is happy for higher U.S. interest rates to draw capital out of other economies and back into the U.S. dollar and the U.S. economy. Russia and China have been trying to break the dominance of the U.S. dollar as the global reserve currency. The U.S. Fed is currently demonstrating why the U.S. dollar is a better place to be when risk rises and times get tough. Sadly, the British pound and a few other highly liquid currencies are casualties of the move and easy targets for short sellers. The UK, Europe and others will suffer higher input costs and reduced economic activity as funding moves west unless the BOE, ECB and other central banks opt to match Fed rate rises and risk deepening recession, said the broker.

Meantime, Nymex crude oil prices are near steady and trading around $87.50 a barrel, after OPEC-plus on Wednesday decided to reduce the cartel’s collective oil production by 2 million barrels per day. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.773%.  

Traders and investors are awaiting what is arguably the most important U.S. data point of the week, if not the month: Friday’s employment situation report for September from the Labor Department. The key non-farm jobs number is expected to come in at up 275,000. The August report showed a non-farm jobs rise of 315,000.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, and the monthly retail chain stores report. Several Federal Reserve officials and U.S. Treasury Secretary Yellen are also slated to speak today.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are weaker in early U.S. trading, still on a corrective pullback after the strong gains seen Monday and Tuesday. Bears have the overall near-term technical advantage amid a six-week-old price downtrend still 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 neutral early today. Today, shorter-term technical resistance comes in this week’s high of 3,820.00 and then at 3,850.00. Support for active traders is seen at 3,750.00 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 4.0

December Nasdaq index futures: Prices are weaker in early U.S. trading, on a corrective pullback after strong gains Monday and Tuesday. Prices remain in a six-week-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 the overnight high of 11,729.75 and then at 12,000.00. On the downside, shorter-term support is seen at Wednesday’s low of 11,366.50 and then at 11,200.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar chart. Bears have the firm advantage. 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 early today. Shorter-term technical resistance is seen at the overnight high of 127 5/32 and then at 128 even. Shorter-term support lies at this week’s low of 126 3/32 even and then at 125 even. Wyckoff’s Intra-Day Market Rating: 5.0

December U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar chart. Bears have the firm technical advantage. 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 early today. Shorter-term resistance lies at the overnight high of 112.22.5 and then at 113.00.0. Shorter-term technical support lies at 112.00.0 and then at this week’s low of 111.25.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a 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 1.0000 and then at this week’s high of 1.0054. Shorter-term support is seen at .9900 and then at Tuesday’s low of .9859. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly down after hitting a three-week high in overnight trading. Bears still have the overall near-term technical advantage but the bulls have momentum. The shorter-term moving averages 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 (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 Wednesday’s low of $85.42 and then at Tuesday’s low of $83.22. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

U.S. grain futures were lower overnight. Risk aversion in the general marketplace is a bit keener late this week and that’s bearish for the grains. Corn and wheat bulls have the slight overall near-term technical advantage. Soybean and meal futures bulls have faded recently. Grains will continue to look to the outside markets for direction. U.S. corn and soybean harvest pressure and commercial hedging will likely limit the upside in the grains in the near term. 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