Tuesday, November 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are still very closely monitoring the civil unrest situation in China. Some market watchers are deeming the recent unrest as bullish for stocks and commodities because it will likely force China to back off on its strict Covid lockdowns that have crimped the world’s second-largest economy. Reports said new Covid cases in China are decelerating a bit. It was calmer in Chinese streets Tuesday evening, with no major protesting reported in the media. Reports said Chinese authorities deployed a heavy police presence in major cities to deter a repeat of the weekend demonstrations. Respected authority on China, Bill Bishop of Sinocism, said the government “has a playbook for dealing with these kinds of events and has been hardening the system for many years for just these kinds of threats.” He said the Chinese government will be “pushing harder on propaganda work, censorship and political thought work. And ‘hostile foreign forces’ will be blamed.” Bishop added, “For all the stability maintenance work Beijing has done they really would have a hard time dealing with tens or hundreds of thousands or more people on the streets in one or more cities. I am not expecting anything like that to happen, but you can’t rule it out, and I will bet the security services are not ruling it out.”
Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly higher on a strong rebound after hitting an 11-month early Monday, and are trading around $79.50 a barrel. There are reports OPEC at its meeting next week will consider cutting the cartel’s collective crude oil production. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.652%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the monthly and quarterly U.S. house price indexes, the S&P CoreLogic/Case-Shiller home price indexes, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. 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 early today. Today, shorter-term technical resistance comes in at Monday’s high of 4,061.25 and then at Friday’s high of 4,094.50. Support for active traders is seen at 4,000.00 and then at last week’s low of 3,937.50. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 Monday’s high of 11,900.50 and then at 12,000.00. On the downside, shorter-term support is seen at last week’s low of 11,526.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. Prices Monday hit a seven-week high. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 128 17/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. Prices Monday hit a seven-week high. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 113.27.0 and then at 114.00.0. Shorter-term technical support lies at the overnight low of 113.03.5 and then at last Friday’s low of 112.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. Prices Monday hit a nearly five-month high. Bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.0500 and then at Monday’s high of 1.0580. Shorter-term support is seen at Monday’s low of 1.0425 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are solidly higher on a strong rebound after hitting an 11-month low on Monday. Bears still have the overall near-term technical advantage as a price downtrend is in place on the daily bar chart. However, the bears now appear to be exhausted to begin to suggest a market bottom is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $80.00 and then at $82.00. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were steady to firmer in overnight trading. The China unrest is still bearish for the grains, but it appears that situation has eased a bit, which may prompt buyers back into the grains. Corn and soybean bulls have the slight overall near-term technical advantage. Wheat bears have the firm near-term technical advantage.
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