Tuesday, September 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins, on corrective bounces from recent solid losses. The Dow Jones Industrial Average on Monday slipped into bear market territory, which is defined by a drop of 20% or more from the recent high.
The key outside markets today see Nymex crude oil prices firmer on a corrective rebound after hitting a seven-month low Monday and are trading around $78.00 a barrel. The U.S. dollar index is lower on a corrective pullback after hitting a 20-year high Monday. Mike Wilson, Morgan Stanley’s noted market analyst, said the rise of the greenback has created an “untenable situation” for risk assets around the globe and that the risk for a financial market crisis is elevated.
Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.821%. The 2-year Treasury note yield is 4.248%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, durable goods orders, the monthly house price index, the S&P Case-Shiller home indexes, the Richmond Fed business survey, the consumer confidence index and new residential sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading, on a corrective rebound after closing at a contract low close on Monday. 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 Monday’s high of 3,730.00 and then at 3,783.25. Support for active traders is seen at the contract low of 3,657.00 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading, on short covering following recent losses. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last Friday’s high of 11,600.25 and then at 11,796.00. On the downside, shorter-term support is seen at the June low of 11,135.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading, on a corrective rebound after hitting a contract low on Monday. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 128 even and then at Monday’s high of 128 31/32. Shorter-term support lies at the contract low of 125 24/32 and then at 125 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are solidly higher in early U.S. trading on a corrective bounce after hitting a contract low on Monday. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Monday’s high of 112.22.5 and then at 113.00.0. Shorter-term technical support lies at the contract low of 111.00.5 and then at 110.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are firmer in early U.S. trading. Bears have the strong overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of .9770 and then at .9800. Shorter-term support is seen at the contract low of .9609 and then at .9550. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are firmer in early U.S. trading, on a corrective bounce after hitting a seven-month low Monday. Bears are still in technical control. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below 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 $79.00 and then at $80.00. Look for sell stops just below technical support at Monday’s low of $76.25 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were firmer overnight, on corrective “Turnaround Tuesday” reversals from Monday’s price action that are common in the grain markets. Still, risk aversion in the marketplace will keep the grain market bulls tentative. Corn and soybean market bulls still have the overall near-term technical advantage. Wheat bulls have the slight overall near-term technical edge. However, if the stock and financial markets continue in bearish turmoil, such could signal tops are in place in the grain markets.
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