Wednesday, November 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are headed for mixed openings when the New York day session begins. The marketplace is on hold ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. However, the million-dollar questions for traders and investors may be answered by comments the FOMC and Powell make regarding the future path of U.S. monetary policy. Specifically, will the Fed will back off the accelerator on aggressively raising interest rates and begin to pivot? FOMC/Powell hints of a pivot are likely to boost risk assets like stocks and commodities. However, a still-aggressive tone on U.S. monetary policy coming from the Fed would likely pressure stocks, bonds and commodities. A Barron’s headline today reads, “Recession is the dark cloud hanging over Powell’s inflation-busting Fed.”
In overnight news, the Euro zone received downbeat economic data when its October manufacturing purchasing managers index (PMI) came in at 46.4, which was slightly below market expectations. A reading below 50.0 suggests contraction in the sector.
The marketplace is still buzzing about unconfirmed reports the Chinese government has set up a committee to wind down its zero-Covid policies. There has been no confirmation from Chinese government officials, with at least one top-ranking official saying he knew nothing of the matter.
Other U.S. economic data due for release Wednesday includes the weekly mortgage applications survey, the ADP national employment report, the global manufacturing PMI and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. A fledgling price uptrend is in place on the daily bar chart to suggest a market bottom is in place. 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 3,928.00 and then at 3,950.00. Support for active traders is seen at 3,850.00 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the October high of 11,734.00 and then at 12,000.00. On the downside, shorter-term support is seen at this week’s low of 11,288.75 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices are still in a three-month-old downtrend on the daily bar chart. Bears have the firm overall technical advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at 122 even and then at this week’s high of 122 28/32. Shorter-term support lies at this week’s low of 120 3/22 and then at 119 even. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly higher in early U.S. trading. Prices are still in a three-month-old downtrend on the daily bar chart. Bears have the firm overall technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 111.00.0 and then at this week’s high of 112.20.5. Shorter-term technical support lies at this week’s low of 110.12.0 and then at 110.00.0. 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 firmer in early U.S. trading. Bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily chart to suggest a market bottom is in place. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.0000 and then at 1.0034. Shorter-term support is seen at this week’s low of .9887 and then at .9800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower in early U.S. trading. 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 $90.00 and then at $91.00. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were sharply lower in overnight trading, on notions the Russians will continue its Ukrainian grain-shipping deal. The grain Monday rallied on news Russia suspended the Ukraine grain-shipping deal with the U.N. and Ukraine. Corn bulls still have the slight overall near-term technical advantage. Soybeans bulls also have the slight chart edge. Wheat bears have regained the near-term technical advantage.
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