Tuesday, October 31–Jim Wyckoff’s morning markets report
In overnight news, the Euro zone got some much tamer inflation news as its consumer price index for October came in up 2.9%, year-on-year, compared to up 4.3% in September. Euro zone third-quarter GDP came in down 0.1% from the second quarter and up 0.1%, year-on-year.
Japan’s central bank left its monetary policy unchanged but said it will “patiently continue monetary easing” until the BOJ achieves stable 2% inflation.
In other news, reports said the World Gold Council says central bank gold-buying surged to 800 tons in the first nine months of this year and could hit a record in 2023.
Focus this week is also on central bank meetings of the Federal Reserve, the Bank of England and the Bank of Japan. The Fed’s FOMC meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. Most of the marketplace expects the FOMC to pause in its interest-rate-increase cycle. Later this week comes the U.S. employment situation report for October.
The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are firmer and trading around $83.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.814%.
U.S. economic data due for release Monday includes the Texas manufacturing outlook survey.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer on short covering after hitting a nearly six-month low last Friday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 4,225.00 and then at 4,250.00. Support for active traders is seen at Monday’s low of 4,143.50 and then at last week’s low of 4,122.25. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher on short covering after hitting a five-month low last week. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 14,500.00 and then at 14,600.00. On the downside, shorter-term support is seen at Monday’s low of 14,303.00 and then at last week’s low of 14,140.25. 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 on short covering. 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 bullish early today. Shorter-term technical resistance is seen at last week’s high of 110 16/32 and then at 111 even. Shorter-term support lies at 109 even and then at this week’s low of 108 16/32. Wyckoff’s Intra-Day Market Rating: 5.5
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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at last week’s high of 106.22.0 and then at 107.00.0. Shorter-term technical support is seen at 106.00.0 and then at 105.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
The December Euro currency futures are higher in early U.S. trading. Bears have the firm overall near-term technical advantage. However, prices have been grinding sideways for the past month. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the October high of 1.0721 and then at 1.0800. Shorter-term support is seen at the overnight low of 1.0611 and then at last week’s low of 1.0542. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $84.00 and then at $85.00. Look for sell stops just below technical support at this week’s low of $81.82 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 5.5
Grain futures prices were mixed to weaker in overnight trading. Not much new in the grains. Technicals are overall bearish for corn and wheat. Technicals are neutral for soybeans. The bullish meal market suggests soybeans will also see some upside price action in the near term.
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.