Wednesday, October 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session near steady levels. Featured in the stock markets this week is third-quarter earnings reports from major companies. The worrisome spreading of the Covid-19 virus in major industrialized countries and elsewhere has traders and investors tentative at mid-week. Microsoft founder Bill Gates, who has been studying pandemics for many years, said in a CNBC interview today that the U.S. should expect a “rough” next several months regarding the Covid-19 virus.
The approaching U.S. presidential election and doubts of any new U.S. stimulus package for Americans before the end of the year are also unknowns that have paused the stock indexes at mid-week.
From a charts perspective, the U.S. stock indexes have had a good run just recently and are due for normal, corrective pullbacks.
In overnight news, the Euro zone August industrial output came in at up 0.7% from July but down 7.4%, year-on-year. Those numbers were in line with market expectations.
The important outside markets early today see the U.S. dollar index slightly firmer. Nymex crude oil prices are weaker and trading around $40.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.71% today.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the producer price index.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading, on a corrective pullback after hitting a six-week high Monday. Bulls still have the solid overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 3,541.00 and then at the September high of 3,576.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,464.25 and then at 3,425.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are weaker on a corrective pullback after hitting a six-week high on Tuesday. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,178.00 and then at this week’s high of 12,248.00. On the downside, shorter-term support is seen at 12,000.00 and then at 11,900.00. 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 on more short covering. 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 175 25/32 and then at 176 even. Shorter-term support lies at 175 even and then at Tuesday’s low of 174 8/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading. 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 resistance lies at 139.12.0 and then at 139.16.0. Shorter-term technical support lies at the overnight low of 139.05.5 and then at 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
The December Euro currency futures are slightly weaker 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 1.1800 and then at last week’s high of 1.1847. Shorter-term support is seen at the overnight low of 1.1734 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is even with 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 Tuesday’s high of $40.53 and then at last week’s high of $41.47. Look for sell stops just below technical support at this week’s low of $39.04 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 6.0
US grain futures are mixed to weaker in early U.S. pre-market trading. Markets this week are seeing a normal pause and downside corrections. Grain market bulls remain in firm technical control. This is normally a time of year when U.S. harvest pressure caps price gains. Such could continue to limit the upside in the near term. Remember that a bull market needs to be fed fresh, positive fundamental news very often, and the recent surge in demand for U.S. grains could be factored into prices.
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.