Wednesday, September 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to mostly firmer overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins.
Traders and investors are awaiting the conclusion of the two-day FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement. The FOMC is widely expected to slightly raise U.S. interest rates at this meeting, marking the third rate rise this year. Fed Chairman Jerome Powell will also hold a press conference after the meeting. As usual, the marketplace will parse the Fed’s and Powell’s wording for clues on the pace of future Fed rate hikes and the Fed’s inflation expectations.
Focus in Europe is now on the new Italian government’s economic plans to address its fiscal and financial problems, which are required by European Union law. Many believe Italian lawmakers won’t comply with EU rules on the matter.
The key outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oil prices slightly lower and trading just above $72.00 a barrel. Supply worries have boosted oil recently. U.S. sanctions against Iran begin in early November, which will likely take much of that country’s oil off the world market. President Trump has singled out Iran in front of the United Nations this week as being a terrorist state that needs heavy economic sanctions. Trump also called out the OPEC oil cartel for holding prices artificially high, saying OPEC countries may not get financial or military support from the U.S.
Other U.S. economic data due for release today includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. The bulls have the firm 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 2,934.25 and then at the contract high of 2,947.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,917.75 and then at 2,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index December futures: Prices are up 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 above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at last week’s high of 7,637.50 and then at 7,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,596.25 and then at 7,550.00. 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 higher on short covering after hitting a four-month low on Tuesday. Bears have the firm overall near-term technical advantage as a steep four-week-old 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 140 16/32 and then at 141 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 139 27/32 and then at this week’s low of 139 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer on short covering after hitting a four-month low on Tuesday. Bears have the firm overall near-term technical advantage. Prices are in a steep four-week-old downtrend on the daily bar 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 bullish early today. Shorter-term resistance lies at this week’s high of 118.23.0 and then at 118.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.14.0 and then at this week’s low of 118.11.0. 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 higher in early U.S. trading. The bulls have faded recently and a five-week-old downtrend is in place on the daily bar chart. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 94.000 and then at 94.320. Shorter-term support is seen at last week’s low of 93.395 and then at 93.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower but not far below Tuesday’s contract high in early U.S. trading. The bulls have the solid overall near-term technical advantage, but it’s at present price levels that rallies this year have petered out. 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 contract high of $72.78 and then at $73.00. Look for sell stops just below technical support at the overnight low of $71.83 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were firmer overnight. Grain market bears still have the overall near-term technical advantage, but corn and soybean prices look like they have bottomed out. U.S. corn and soybean harvest pressure is under way at full speed, so look for farmer selling pressure to limit the upside. Traders are awaiting Friday’s USDA grain stocks projections.
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
Glad to be one of many visitors on this awful web site : D.