Monday, October 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. U.S. government offices and many banks are closed Monday for the Columbus Day national holiday. Stock market traders will focus on a barrage of corporate earnings reports out this week.
Risk aversion is still elevated to start the trading week. The Russia-Ukraine war has escalated as Russia launched missiles into several Ukrainian cities after a strategic bridge for Russia in the Crimea region suffered major damage from explosions, with Ukraine’s military likely the culprit. Meantime, North Korea has test-fired ballistic missiles to provoke the West in an already-tense global geopolitical environment.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $92.00 a barrel. The U.S. Treasury cash market is closed Monday for the holiday.
U.S. economic data due for release Monday is light and includes the employment trends index. Traders are looking ahead to a key U.S. inflation report on Thursday morning, the consumer price index report for September, which is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage amid a seven-week-old price downtrend still in place 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 above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at 3,700.00 and then at 3,750.00. Support for active traders is seen at the overnight low of 3,618.00 and then at the October low of 3,571.75. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are slightly down in early U.S. trading. Prices remain in a seven-week-old downtrend on the daily bar chart. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 11,200.00 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight low of 10,986.00 and then at the October low of 10,890.75. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Prices are in a nine-week-old downtrend on the daily bar chart. Bears have the solid technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Friday’s high of 126 13/32 and then at 127 even. Shorter-term support lies at 125 even and then at the contract low of 123 30/32. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are slightly lower in early U.S. trading. Prices are in a nine-week-old downtrend on the daily bar chart. Bears have the solid technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Friday’s high of 111.31.0 and then at 112.16.0. Shorter-term technical support lies at last week’s low of 111.06.0 and then at 111.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a long-term downtrend on the daily bar chart. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of .9803 and then at Friday’s high of .9867. Shorter-term support is seen at .9700 and then at .9650. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker in early U.S. trading after hitting a five-week high overnight. Bulls have momentum. 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $93.55 and then at $95.00. Look for sell stops just below technical support at $91.00 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were sharply higher, as the Russia-Ukraine war has escalated, meaning a Ukraine grain-shipping agreement between the two countries is in serious jeopardy. Ukraine is a major world grain producer. Corn and wheat bulls have the overall near-term technical advantage. Soybean and meal futures bears have the slight chart edge. Grains will continue to look to the outside markets for direction.
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