Wednesday, November 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs on Tuesday.
The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends Wednesday afternoon with a statement and press conference from Fed Chairman Jay Powell. Most Fed watchers believe the U.S. central bank will announce the timing of tapering of its monthly bond purchases. An immediate reduction of $15 billion per month of bond purchases is being bandied about the marketplace. No changes in U.S. interest rates are expected, but market watchers will parse the Fed’s comments for clues on the timing of future rate increases.
On Friday the U.S. employment situation report for October is due. The key non-farm payrolls component of that report is expected to rise 450,000 compared to a rise of 194,000 in the September report.
Reports say more provinces in China are fighting coronavirus outbreaks than at any time since Covid-19 emerged in Wuhan province in 2019. China officials are warning that new Covid lockdowns in China are likely to dent economic growth.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are sharply lower and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.553%.
It’s a busy day of U.S. economic data released Wednesday, including the weekly MBA mortgage applications survey, the ADP national employment report, the Treasury quarterly refunding announcement, the U.S. services PMI, the ISM report on business services, manufacturers’ shipments and inventories and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near slightly down in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 Tuesday’s contract and record high of 4,627.00 and then at 4,650.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,586.50 and then at 4,550.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are slightly up in early U.S. trading and poked to a record high overnight. 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 record high of 15,987.25 and then at 16,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 15,768.50 and then at 15,595.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading and hit a five-week high overnight. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 161 14/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 17/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher 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 is seen at 131.07.0 and then at 131.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.27.5 and then at 130.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1650 and then at 1.1680. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1555 and then at the October low of 1.1537. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower in early U.S. trading. Bulls still have the near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $83.08 and then at $84.00. Look for sell stops just below technical support at the overnight low of $81.91 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were mixed to weaker overnight. Not much new at mid-week. Corn and wheat bulls have the technical advantage to suggest more gains in the near term. Soybeans continue to struggle. It’s not likely that soybeans will continue to trend in an inverse fashion to corn and wheat. Corn and soybean harvest in the U.S. is winding down and focus in the coming months will be on South American corn and soybean growing conditions, and global demand.
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