Wednesday, September 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in subdued trading overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Gold prices are higher in pre-U.S.-session trading, on bargain hunting, short covering and some safe-haven demand following a fiery speech by U.S. President Trump at the U.N. on Tuesday. Trump threatened to completely destroy North Korea.
Markets have paused ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. No interest rate changes are expected from the FOMC at this meeting. However, it is expected the Fed will announce it is drawing down its big balance sheet of securities. Fed Chair Janet Yellen will hold a press conference after the FOMC meeting ends. Also, the Federal Reserve will release new economic projections. The inflation projections will be examined very closely.
The key outside markets on Wednesday morning see the U.S. dollar index weaker. The greenback bears remain in firm technical control. Meantime, Nymex crude oil futures are higher this morning. The oil bulls have the slight near-term technical advantage.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading, and near this week’s contract and record high. 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 with 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 2,515.00 and then at 2,525.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,497.75 and then at 2,487.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index December futures: Prices are near steady in early U.S. trading today. Prices are not far below this month’s record high. 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 this week’s high of 6,018.25 and then at the contract high of 6,025.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,967.25 and then at 5,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering from recent selling pressure. Bulls still have the overall near-term technical advantage but have faded and need to show more power soon. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 154 23/32 and then at this week’s high of 155 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 154 even and then at 153 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering. Bulls still have the overall near-term technical advantage, but have faded badly recently and need to show more power soon. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 126.09.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 125.30.0 and then at 125.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 92.000 and then at last week’s high of 92.420. Shorter-term support is seen at last week’s low of 91.360 and then at 91.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the August high of $50.51 and then at $52.00. Look for sell stops just below technical support at this week’s low of $49.19 and then at $48.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight. Early corn harvest reports are coming in a bit lower than expected. Grain market bulls have shown impressive resilience recently, to suggest harvest lows are in place and that prices can work at least sideways, if not sideways to higher, into the end of the year.