Tuesday, November 7–Jim Wyckoff’s morning markets report
Asian and European markets were mostly lower in overnight trading. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
In overnight news, Australia’s central bank raised its main interest rate by 0.25% to 4.35%, saying inflation is still too high. The central bank had gone four monetary policy meetings in a row with a pause. Barrons reported today the Reserve Bank of Australia’s surprise rate hike to crack down on inflation may be a precursor to what the U.S. central bank may have to do in the coming months. The Wall Street Journal reported overnight that Minneapolis Fed official Neel Kashkari said he is not convinced U.S. interest rate hikes are done and said he would rather err on side of overtightening.
Meantime, China’s October exports fell 6.4%, year-on-year, which was lower than expected. China’s imports rose a less-than-expected 3.0%, year-on-year.
The Euro zone producer price index for September came in at up 0.5% from August but down 12.4%, year-on-year.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are lower and trading around $79.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.614%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the international trade report, the IDB/TIPP economic optimism index and consumer credit.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. 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 4,400.00 and then at the October high of 4,430.50. Support for active traders is seen at last Friday’s low of 4,325.50 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are weaker in early U.S. trading. 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 15,257.50 and then at 15,400.00. On the downside, shorter-term support is seen at 15,000.00 and then at 14,850.00. 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. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 114 even and then at last week’s high of 114 27/32. Shorter-term support lies at this week’s low of 112 12/32 and then at 112 even. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 108.07.5 and then at last week’s high of 108.25.0. Shorter-term technical support is seen at this week’s low of 107.18.0 and then at 107.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. Bears have the overall near-term technical advantage. However, prices have been grinding sideways to higher for the past month. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0774 and then at 1.0800. Shorter-term support is seen at 1.0633 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower and hit a nine-week low in early U.S. trading. 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 the overnight high of $81.05 and then at this week’s high of $82.24. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were lower in overnight trading, following some downbeat economic news coming out of China. Technicals remain overall bearish for corn and wheat. Technicals are bullish for soybeans and meal.
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