Thursday, November 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
It is a busy day of economic and political activity Thursday.
Traders and investors are expecting U.S. president Donald Trump to nominate Federal Reserve governor Jerome Powell as the next chairman of the Fed. Fed watchers say Powell has monetary policy thoughts that are similar to current Fed Chair Janet Yellen.
House Republicans are also set to unveil a new tax-reform plan, possibly as soon as Thursday.
The Bank of England is holding its monetary policy meeting on Thursday It is expected the BOE will tighten its monetary policy.
The key “outside markets” on Thursday morning find the U.S. dollar index lower. The greenback bulls still have the overall near-term technical advantage. Meantime, Nymex crude oil futures prices are near steady after hitting a six-month high on Wednesday. Prices are trading around $54.50 a barrel.
There is a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the ISM New York report on business, the global manufacturing PMI and monthly chain store sales reports.
Friday brings the U.S. employment report for October. The key non-farm payrolls number is forecast to come in at up 315,000.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract and record high on Wednesday. Bulls have the solid overall near-term technical advantage and there are no strong, early technical clues that a market top is close at hand. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,585.50 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,563.50 and then at 2,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index December futures: Prices are weaker in early U.S. trading, on mild profit taking after hitting another contract and record high on Wednesday. Bulls still have the solid technical advantage. 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 the contract high of 6,284.50 and then at 6,300.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,200.00 and then at 6,175.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Bears have the overall near-term 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 to bullish early today. Shorter-term technical resistance is seen at this week’s high of 153 10/32 and then at 153 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at Wednesday’s low of 151 31/32 and then at this week’s low of 151 11/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly higher in early U.S. trading. Bears have the overall near-term 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 to bullish early today. Shorter-term resistance lies at this week’s high of 125.04.5 and then at 125.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 124.23.0 and then at 124.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is weaker in early U.S. trading. The greenback bulls are still working on a seven-week-old uptrend on the daily bar chart. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 94.835 and then at last week’s high of 95.060. Shorter-term support is seen at the overnight low of 94.305 and then at 94.100. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady in early U.S. trading. Prices hit a six-month high Wednesday. Bulls have the overall near-term technical advantage amid a near-term price uptrend being in place. Look for buy stops to reside just above technical resistance at this week’s high of 55.22 and then at $56.00. Look for sell stops just below technical support at this week’s low of $53.75 and then at $53.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were firmer overnight on short covering. Traders and investors will closely examine this morning’s weekly USDA export sales report. Harvest in the U.S. Corn Belt is well past the half-way point. Focus has switched to world supply and demand fundamentals. Recent price action in the grains still hints at market bottoms in place.