Wednesday, September 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight, with European stocks mostly up and Asian equities mostly down. U.S. stock indexes are pointed toward slightly firmer openings when the New York day session begins. There is little risk aversion in the marketplace so far this week, despite some looming trade and secondary currency matters that could upset traders and investors in the near term.
The U.S. economic report pace picks up speed today after light schedules Monday and Tuesday. The highlight today is the producer price index for August, which is expected to be up 0.2% from July.
On Thursday the European Central Bank meets and is expected to report it will continue to pull back from years of a very easy monetary policy. The Bank of England also holds is regular monetary policy meeting Thursday.
The key outside markets today find the U.S. dollar index lower. Meantime, Nymex crude oil prices are higher and trading just below $70.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. The bulls have the firm overall near-term technical advantage amid an uptrend still in place 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 below the 9-day. The 9-day is above 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 2,900.00 and then at 2,910.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,880.00 and then at last week’s low of 2,869.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index December futures: Prices are firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,568.00 and then at 7,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,530.25 and then at 7,500.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on a mild corrective bounce after hitting a four-week low on Tuesday. Bears now have the overall near-term technical advantage as a fledgling downtrend is in place on the daily chart. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 142 10/32 and then at this week’s high of 142 27/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 141 28/32 and then at 141 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up on a corrective rebound after hitting a four-week low on Tuesday. Bears have the overall near-term technical advantage. Prices have been trending lower for three weeks. 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 early today. Shorter-term resistance lies at the overnight high of 119.15.0 and then at 119.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.09.0 and then at 119.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower in early U.S. trading. The bulls still have the overall near-term technical advantage but trading has been choppy recently. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at last week’s high of 95.280 and then at 95.500. Shorter-term support is seen at last week’s low of 94.450 and then at 94.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. The bulls have now regained good upside momentum, but very stiff technical resistance still lies just above the market. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $70.14 and then at $71.00. Look for sell stops just below technical support a the overnight low of $69.50 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed but mostly weaker overnight. Grain market traders are focused on this morning’s monthly USDA supply and demand reports. Trading early today will likely be subdued ahead of the government’s late-morning update on supply and demand. The report is expected to be generally bearish. The bears have the firm overall near-term technical advantage in the grain futures 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