Tuesday, November 16–Jim Wyckoff’s Morning Markets Report
Global stock markets mostly firmer in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The stock indexes have been in a pause mode recently, as traders and investors weigh positive corporate earnings reports against rising inflation and rising Covid-19 cases in Asia, Europe and even in regions of the U.S.
The U.S. economic data point of the day is the October retail sales report, expected to come in at up 1.5% from September. Sales rose 0.7% in September from August.
U.S. President Joe Biden and China President Xi Jinping met in a conference call on Monday, with both sides saying the meeting was upbeat—even if not much tangible came out of the meeting.
In other overnight news, the Euro zone third-quarter GDP was reported up 2.2% from the second quarter and up 3.7%, year-on-year. Those numbers were in line with market expectations.
Bitcoin prices dropped over 5% overnight.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are higher and trading around $81.20 a barrel. The crude oil market bulls appear to have run out of gas and a market top could be in place. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.605%. The 10-year yield has recently spiked up.
It’s a very busy day for U.S. economic releases Tuesday, including the weekly Johnson Redbook and chain store sales indexes, retail sales, import and export prices, industrial production and capacity utilization, manufacturing and trade inventories, the NAHB housing index and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading and not far below this month’s record high. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 this week’s high of 4,697.50 and then at the contract and record high of 4,711.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,643.75 and then at last week’s low of 4,625.25. Sell stops likely reside below those levels. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 16,276.50 and the at 16,400.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 16,092.25 and then at 16,000.00. Sell stops likely reside just below those levels. 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. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 161 even and then at 161 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 160 1/32 and then at 159 18/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance is seen at this week’s high of 130.27.5 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.07.5 and then at the October low of 129.31.0. 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 and hit a 16-month low overnight. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-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 1.1400 and then at this week’s high of 1.1469. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1356 and then at 1.1300. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage but have faded recently to suggest a market top is in place. The shorter-term moving averages are bearish early today as the 4-day is below 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 the overnight high of $81.81 and then at $83.00. Look for sell stops just below technical support at this week’s low of $79.30 and then at the November low of $78.25. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were weaker overnight, on corrective pullbacks from recent gains. The soybean meal futures market has been on fire recently and is trending solidly higher, which signals a market bottom is in place for beans. Corn and wheat bulls have the near-term technical advantage. Corn is presently following the lead of the stronger wheat market.
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