Thursday, November 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Increasing restrictions on businesses and the public in the U.S. and Europe, to fight off the out-of-control Covid-19 pandemic, are starting to bite global equity markets, after they had been looking past the matter because of the upbeat vaccine news recently. Hope has been clashing with fear in the marketplace, and on this day it appears fear is winning the battle. New U.S. Covid infections topped 170,000 Wednesday and the U.S. death toll has moved above a quarter-million citizens.
News reports said Goldman Sachs is forecasting bull markets in raw commodities as a hedge against impending inflation. Goldman forecast a return of around 27% over the next 12-months on the Goldman Sachs Commodity Index (GSCI) index, with a 19% return for precious metals, 40% for energy, 3% for industrial metals and a -1% return on agriculture. The grain futures markets are already in a major bull run. Goldman reportedly kept its target of $2,300 an ounce for gold and $30 an ounce for silver.
The U.S. dollar index is higher early today on a corrective bounce from selling pressure earlier this week. Many analysts are predicting further depreciation in the coming months for the greenback on the foreign exchange market. The other important outside market sees crude oil prices lower and trading around $41.15 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, leading economic indicators, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage and prices are not far below the recent spike high. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 3,600.00 and then at this week’s high of 3,637.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,542.50 and then at 3,525.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are modestly down in early U.S. trading. Bulls have the firm overall near-term technical advantage, but stiff resistance layers lie just above the market. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 12,000.00 and then at this week’s high of 12,096.25. On the downside, shorter-term support is seen at the overnight low of 11,804.50 and then at 11,700.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Bears still have the firm near-term technical advantage. 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 this week’s high of 173 15/32 and then at 174 even. Shorter-term support lies at the overnight low of 172 24/32 and then at 172 5/32. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Bears still have the firm near-term technical advantage. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 138.13.0 and then at this week’s high of 138.16.5. Shorter-term technical support lies at the overnight low of 138.07 and then at 138.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1886 and then at this week’s high of 1.1925. Shorter-term support is seen at this week’s low of 1.1849 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are weaker in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $42.08 and then at this week’s high of $42.68. Look for sell stops just below technical support at the overnight low of $41.57 and then at this week’s low of $40.40. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are lower in early U.S. pre-market trading. Profit taking from recent gains is featured. Also, today’s risk-off trader mentality is negative for the grains. On tap today is the weekly USDA export sales report. The grain market bulls still have the solid overall near-term technical advantage amid price uptrends in place in all three 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