Wednesday, November 1–Jim Wyckoff’s morning markets report
Asian and European stocks were mixed to firmer overnight. U.S. stock indexes are pointed to firmer openings when the New York day session begins.
Focus at mid-week is on central bank meetings of the Federal Reserve and the Bank of England. The Fed’s FOMC meeting began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. Most of the marketplace expects the FOMC to pause in its interest-rate-increase cycle. The Bank of England meets on its monetary policy Thursday. Friday comes the U.S. employment situation report for October.
In overnight news, China’s private manufacturing purchasing managers index (PMI) declined more than expected in October. Business confidence over the next 12 months weakened and reached the lowest level since September of 2022. The Caixin manufacturing PMI for October came in at 49.5 versus 50.6 in September and 50.8 expected. A reading below 50.0 suggests contraction in the sector.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are up and trading around $82.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.899%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, the weekly DOE liquid energy stocks report, domestic auto industry sales and construction spending.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,215.00 and then at 4,250.00. Support for active traders is seen at Tuesday’s low of 4,166.75 and then at this week’s low of 4,143.50. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 14,500.00 and then at 14,600.00. On the downside, shorter-term support is seen at this week’s low of 14,303.00 and then at last week’s low of 14,140.25. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 110 12/32 and then at 111 even. Shorter-term support lies at this week’s low of 108 16/32 and then at 108 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker 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 lies at this week’s high of 106.21.0 and then at 107.00.0. Shorter-term technical support is seen at the overnight low of 105.28.0 and then at 105.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the firm overall near-term technical advantage. However, prices have been grinding sideways for the past month. 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 above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at 1.0600 and then at this week’s high of 1.0696. Shorter-term support is seen at last week’s low of 1.0542 and then at 1.0523. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer in early U.S. trading. 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 early today. Look for buy stops to reside just above technical resistance at Tuesday’s high of $83.37 and then at $85.00. Look for sell stops just below technical support at the October low of $80.20 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed in overnight trading. Not much new in the grains this week. Technicals are overall bearish for corn and wheat. Technicals are neutral for soybeans. The bullish meal market suggests soybeans will also see some upside price action in the near term.
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