Thursday, October 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. Trader and investor attitudes are upbeat this week, as they choose to focus on positive corporate earnings reports. For the moment the marketplace is brushing aside slowing economic growth in China, supply chain bottlenecks and rising inflation prospects.
The European Central Bank is holding its regular monetary policy meeting Thursday. No changes in ECB monetary policy are expected. ECB President Christine Lagarde is likely to say the Euro zone remains too weak for policy makers to pull back stimulus. Meantime, Canada’s central bank on Wednesday ended its quantitative easing program.
The World Gold Council reported gold demand in the third quarter declined 7% compared to Q3 2020. Outflows from gold-backed ETFs were the primary factor. Increasing jewelry demand did mitigate the slide in demand, said the WGC. Gold jewelry demand grew 33%, year-on-year. Meantime, central banks purchased 69 metric tons for reserves vs 10 MT in same period in 2020.
The key outside markets today see the U.S. dollar index slightly higher. Crude oil prices are lower and trading around $81.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.556%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the advance estimate on third-quarter GDP, pending home sales, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. 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 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 neutral early today. Today, shorter-term technical resistance comes in at the contract high of 4,590.00 and then at 4,600.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,522.50 and then at 4,500.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are higher in early U.S. trading. 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 to bullish early today. Shorter-term technical resistance is seen at the contract high of 15,717.50 and then at 15,800.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,500.00 and then at this week’s low of 15,295.75. Sell stops likely reside 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 slightly higher in early U.S. trading. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 161 5/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 16/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are lower in early U.S. trading. 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 is seen at the overnight high of 131.02.5 and then at this week’s high of 131.07.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.25.0 and then at 130.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the October high of 1.1681 and then at 1.1700. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1584 and then at the October low of 1.1537. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bulls still have the solid near-term technical advantage. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $82.43 and then at $83.00. Look for sell stops just below technical support at the overnight low of $80.58 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed overnight. Corn bulls have gained good momentum after solid gains on Wednesday, but now need to show important follow-through strength yet this week to suggest a price uptrend can be sustained. Wheat bulls have the firm overall near-term technical advantage. Soybeans continue to struggle. Commercial hedge pressure in soybeans and corn has peaked and is on the decline. Out 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