Tuesday, October 25–Jim Wyckoff’s morning markets report
In overnight news, China’s government ramped up efforts to stimulate the world’s second-largest economy by issuing 1 trillion ($137 billion) in sovereign bonds to upgrade infrastructure. The news rallied Chinese stock markets.
In other China news, Bloomberg reported the big Chinese property developer Country Garden defaulted on its dollar debt for the first time after failing to complete the payment within a grace period that ended last week.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are slightly down and trading around $85.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.863%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. 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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,290.50 and then at 4,325.00. Support for active traders is seen at this week’s low of 4,213.25 and then at 4,200.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are lower in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 14,948.75 and then at 15,000.00. On the downside, shorter-term support is seen at 14,600.00 and then at 14,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 110 16/32 and then at 111 even. Shorter-term support lies at 109 even and then at 108 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s overnight high of 106.22.0 and then at 107.00.0. Shorter-term technical support is seen at 106.00.0 and then at the contract low of 105.10.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears are still in overall near-term technical control. However, a price downtrend on the daily bar chart has been negated and prices are trending up, which are early clues that a market bottom is in place. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0630 and then at 1.0700. Shorter-term support is seen at 1.0523 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $85.00 and then at $86.00. Look for sell stops just below technical support at this week’s low of $82.94 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were steady to narrowly mixed in overnight trading. Technicals are overall bearish for corn and wheat, although both markets are showing early clues of posting major price bottoms. Technicals are neutral for soybeans. The red-hot bullish meal market suggests soybeans will also see 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.
Jim Wyckoff