Monday, September 9–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor risk appetite remains elevated to start the trading week. News Friday that China’s central bank eased its monetary policy and reports over the weekend that the U.K. appears to be avoiding, for now, a “hard Brexit,” have most of the world marketplace in an upbeat mood.
There was a Dow Jones Newswires report over the weekend that said China’s official economic numbers are probably not accurate and likely are overly hyped by the government. The report said China’s overall economic growth (gross domestic product) is probably about half of what the official numbers say, or actually around 3%, annual growth. This news is not surprising to many market watchers.
There were protesters demonstrating in Hong Kong again over the weekend. However, the markets are not now deeming the protests as an escalation in the overall situation.
The key “outside markets” today see Nymex crude oil prices firmer and trading around $57.00 a barrel. The U.S. dollar index is slightly weaker in early U.S. trading today.
U.S. economic data due for release Monday includes the employment trends index and consumer credit.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit a five-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 3,000.00 and then at 3,015.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,972.25 and then at 2,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid overall technical advantage amid a bullish upside “breakout” last week from the choppy trading range. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last week’s high of 7,912.00 and then at 7,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 7,857.75 and then at 7,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage but trading has been sideways for three weeks. 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 bearish early today. Shorter-term technical resistance is seen at 164 even and then at the overnight high of 164 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 163 6/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 bearish early today. Shorter-term support lies at last week’s low of 130.27.0 and then at 130.20.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 131.11.5 and then at 131.16.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 98.040 and then at Wednesday’s high of 98.490. Shorter-term support is seen at last week’s low of 97.580 and then at 97.250. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $57.28 and then at last week’s high of $57.76. Look for sell stops just below technical support at $56.50 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were steady to weaker in overnight trading. Corn was down around 1/2 cent, soybeans down 1 to 2 cents and wheat down 2 to 4 cents. The data point of the day for the grain markets is the weekly USDA export inspections report. The big report of the week will be Thursday’s monthly USDA supply and demand report, including new government estimates of the size of the US crops. At present, grain market fundamentals remain firmly bearish. Weather in the US Midwest remains non-problematic, but there is talk of frost in the northern Midwest late this week or early next. As that timeframe gets closer the grain markets may show more of a reaction if a hard frost is expected in the region. The latest government reports show the big speculative “funds” are still significantly net short the grain markets. In the coming few weeks, it appears that the only thing that will awake the grain market bulls would be a hard frost in the US Midwest to kill the corn and soybean crops, or some surprise, positive news on the U.S.-China trade war front.
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