Monday, October 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to weaker openings when the New York day session begins. The U.S. government is closed for the Columbus Day holiday Monday, including the U.S. Treasury markets. That is likely to make for quieter trading in the U.S. today. Traders and investors worldwide are tentative to start the trading week. Supply-chain bottlenecks and rising energy prices are prompting worries about slowing global economic growth. Goldman Sachs over the weekend cut its U.S. economic growth forecasts for this year and next. Some European countries are worried about having enough energy for winter heating. These concerns followed an uninspiring U.S. employment report released Friday morning.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are solidly up, hit a seven-year high overnight, and are trading around $81.50 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.612%. Bond yields are on the rise, which has heightened fears of rising inflation or even stagflation, which is a combination of rising prices and slowing economic growth.
U.S. economic data due for release Monday includes is light and includes the employment trends index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are in a five-week-old downtrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,388.00 and then at last week’s high of 4,421.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,355.00 and then at 4,320.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. Prices are in a five-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 14,829.00 and then at last week’s high of 15,001.25. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,600.00 and then at 14,500.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are down and hit a nearly four-month low 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 157 23/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at 157 even and then at 156 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are down and hit a nearly four-month low 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 bearish early today. Shorter-term resistance is seen at the overnight high of 131.01.5 and then at 131.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.25.5 and then at 131.20.0. 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 have the solid 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1601 and then at the October high of 1.1656. Buy stops likely reside just above those levels. Shorter-term support is seen at the October low of 1.1544 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are sharply higher in early U.S. trading and hit a seven-year high. Bulls have the strong near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $82.00 and then at $83.00. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures were firmer overnight. Rising crude oil futures are supporting grains early this week. Short covering is featured in corn and soybeans. Harvesting of the U.S. corn and soybean crops is progressing rapidly and that’s bearish and will limit price gains in corn and soybeans. The corn and soybean market bears have the near-term technical advantage, while the wheat bulls 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