Monday, October 30–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed to slightly weaker overnight. China’s stock market was down on worries about its slumping bond markets. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. U.S. indexes on Friday hit record highs. It will be another busy week of U.S. corporate earnings, including Apple and FaceBook results.
It’s a very busy week for U.S. economic data, including the FOMC meeting that begins Tuesday and ends Wednesday afternoon with a statement. Friday brings the U.S. employment report for October. Also, the Bank of Japan and Bank of England hold monetary policy meetings this week.
Tensions appeared to ease in Spain’s Catalonia region over the weekend. Catalonia’s leader called for non-violent protests for the regions secession from Spain. Meantime, the Spanish prime minister called for elections in the Region in December.
Reports over the weekend said President Donald Trump will nominate Jerome Powell as the next chairman of the Federal Reserve.
The key “outside markets” on Monday morning find the U.S. dollar index lower, on a corrective pullback from recent good gains that saw the index Friday hit a 3.5-month high. Meantime, Nymex crude oil futures prices are slightly lower and trading just below $54.00 a barrel. Prices Friday hit a six-month high.
U.S. economic data due for release Monday includes personal income and outlays, and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are weaker in early U.S. trading, on profit taking after hitting a contract and record high on Friday. Bulls still have the firm 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,580.75 and then at 2,590.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,557.50 and then at last week’s low of 2,541.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index December futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract and record high on Friday. 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 6,225.75 and then at 6,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,175.00 and then at 6,150.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher on short covering after hitting a five-month low on Friday. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 152 even and then at 152 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 151 11/32 and then at 151 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are higher on short covering after hitting a 5.5-month low last week’s. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 125.00.0 and then at 125.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight 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: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower on profit taking after hitting a 3.5-month high on Friday. The greenback bulls are 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.835 and then at Friday’s high of 95.060. Shorter-term support is seen at 94.250 and then at 94.100. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady in early U.S. trading after hitting a six-month high on Friday. 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 Friday’s high of 54.20 and then at $55.00. Look for sell stops just below technical support at $53.11 and then at $52.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were mixed overnight. Not much new. Harvest progress in the U.S. Corn Belt has been good. Recent price action in the grains still hints at market bottoms in place.