Monday, November 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The marketplace is uneasy to start the trading week, as there is civil unrest in China over its strict zero-Covid policies. Reports said there were demonstrations across China over the weekend. It’s the largest show of discontent since the Tiananmen Square protests in 1989. China is the world’s second-largest economy and the most populous nation. The geopolitical and economic consequences of a further escalation in protests and any crackdown by Chinese authorities would be huge.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly lower, hit a 10-month low overnight, and are trading around $74.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.692%.
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.
U.S. economic data due for release Monday includes the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading, profit taking after hitting a nine-week high on Friday. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight 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: 4.0
March Nasdaq index futures: Prices are lower 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 below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,865.00 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: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading and hit a seven-week high overnight. 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 technical resistance is seen at the overnight 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: 5.5
March U.S. T-Notes: Prices are firmer in early U.S. trading and hit a seven-week high overnight. 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 the overnight high of 113.27.0 and then at 114.00.0. Shorter-term technical support lies at 113.00.0 and then at Friday’s low of 112.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are solidly higher and hit a nearly five-month high in early U.S. trading. 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 to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0580 and then at the 1.0600. Shorter-term support is seen at 1.0500 and then at the overnight low of 1.0425. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
January Nymex crude oil prices are lower and hit a 10-month low in early U.S. trading. Bears have the solid overall near-term technical advantage as a price downtrend is in place on the daily bar chart. 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 bearish early today. Look for buy stops to reside just above technical resistance at $75.00 and then at the overnight high of $76.49. Look for sell stops just below technical support $73.00 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were mostly lower in overnight trading. On tap today is the weekly USDA export inspections report. Increased risk aversion amid the China unrest is bearish for the grains. Corn and soybean bulls and bears are on a level overall near-term technical playing field. 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