Thursday, September 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down overnight. U.S. stock indexes are set for lower openings when the New York day session begins. Traders and investors are more downbeat late this week, following a reminder from the Federal Reserve on Wednesday afternoon that the U.S. economic outlook is “highly uncertain.” Wednesday afternoon’s conclusion of the Open Market Committee meeting (FOMC) saw no change in U.S. interest rates, as expected, but the Fed signaled U.S. rates will not rise for at least three years. The Fed reiterated it wants to see inflation at 2% or slightly above. Many were hoping for more clarity on how the Fed plans to stoke inflation in the coming months. A Wall Street Journal report by Greg Ip suggested the FOMC statement and Chairman Jay Powell’s press conference were strong on words but weak on actions.
It could be that the marketplace late this week, following the FOMC meeting, may be considering more the longer-term implications of the Covid-19 economic damage, instead of the recently better-than-expected recoveries in some sectors of world economies. When one thinks about when most economic and social conditions could be “back to normal” the horizon for such is a long way off. And there are sure to be permanent and deep Covid-19 scars in sectors of the major global economies.
In overnight news, the Euro zone August consumer price index was down 0.4% from July and down 0.2%, year-on-year. These numbers are a stark reminder of the difficulty central banks may have in reigniting inflation in the coming months.
The Bank of Japan left its monetary policy unchanged at its regular meeting Thursday, continuing its easy-money stance. The Bank of England is meeting today on its monetary policy.
The important outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are near steady and trading around $40.00. The yield on the U.S. Treasury 10-year note is trading around 0.68% today.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and new residential construction.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,386.50 and then at this week’s high of 3,419.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,310.25 and then at the September low of 3,286.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the overall 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. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,288.50 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight low of 11,002.25 and then at the September low of 10,924.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. 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 even with 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 177 4/32 and then at 177 16/32. Shorter-term support lies at this week’s low of 175 28/32 and then at 175 16/32. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-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 139.23.0 and then at the September high of 139.29.0. Shorter-term technical support lies at this week’s low of 139.10.5 and then at 139.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly higher in early U.S. trading but hit a five-week low overnight. Bulls have the solid overall near-term technical advantage but trading has turned sideways at higher levels. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance 1.1900 and then at at this week’s high of 1.1924. Shorter-term support is seen at the overnight low of 1.1759 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
October Nymex crude oil prices are near steady in early U.S. trading. Bulls are having a very good week. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $40.34 and then at $41.00. Look for sell stops just below technical support at the overnight low of $39.42 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are firmer in early U.S. pre-market trading. Bulls have the near-term technical advantage in all three markets, but the wheat bulls have faded. Traders will closely examine this morning’s weekly USDA export sales report. Export demand for U.S. corn and soybeans remains strong and is presently trumping very adequate global grain supplies. Early U.S. harvest results will be closely examined.
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