Wednesday, November 23–Jim Wyckoff’s Morning Markets Report
Most global stock markets were slightly up overnight. U.S. stock indexes are headed for slightly higher openings when the New York day session begins. The marketplace remains tentative at mid-week as Covid-19 cases in China continue to rise and are crimping the world’s second-largest economy. Newswire reports this morning quoted Chinese officials as saying they will further ease China’s monetary policies in an effort to produce more economic growth.
Meantime, the Euro zone reported its November manufacturing purchasing managers index (PMI) at 47.3, which was slightly above market expectations and compares to the October reading of 46.4. Still, a reading below 50.0 suggests contraction in the sector. It was the fifth month in a row of manufacturing sector contraction for the Euro zone.
Today is the busiest day for U.S. economic data this holiday-shortened trading week, including the minutes from the last FOMC monetary policy meeting, to be released in the early afternoon. The minutes may contain a few new clues on the future path and timing of Fed monetary policy. U.S. markets are closed on Thursday for the Thanksgiving holiday.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are lower and trading around $79.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.756%.
Other U.S. economic data due for release Wednesday includes the weekly jobless claims report, the weekly MBA mortgage applications survey, durable goods orders, the U.S. flash services and manufacturing purchasing managers indexes (PMI), new residential sales, the University of Michigan consumer sentiment survey 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. Bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. 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 above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the November high of 4,050.75 and then at 4,100.00. Support for active traders is seen at this week’s low of 3,937.50 and then at last week’s low of 3,912.50. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 12,000.00 and then at the November high of 12,118.75. On the downside, shorter-term support is seen at this week’s low of 11,526.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices hit a six-week high on Wednesday. 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 technical resistance is seen at 127 even and then at 128 even. Shorter-term support lies at 126 even and then at this week’s low of 125 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s high of 113.00.0 and then at 113.16.0. Shorter-term technical support lies at this week’s low of 112.11.5 and then at 112.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. 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 early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0436 and then at 1.0500. Shorter-term support is seen at this week’s low of 1.0316 and then at 1.0250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are lower in early U.S. trading. Bears have the near-term technical advantage as a price downtrend is in place on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $80.00 and then at $81.00. Look for sell stops just below technical support at the overnight low of $78.38 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed in overnight trading. Not much new this week, in quiet trading. Bulls are being squelched due to ongoing demand worries amid the China Covid lockdowns. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the firm near-term technical advantage. Grain traders will continue to closely monitor the key outside markets: the U.S. dollar index and crude oil 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.
Jim Wyckoff