Friday, October 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to slightly up overnight, with Asian shares mixed and European shares mostly firmer. U.S. stock indexes are set to open the New York day session slightly higher. The stock indexes are drifting at present and such will likely continue to be the case until after the U.S. elections in early November.
Markets showed little reaction to Thursday evening’s U.S. presidential debate, which was more civil than the first one. No candidate made any major gaffe and most felt there was no big winner in the debate.
Covid-19 stimulus package discussions between U.S. congressional Democrats and Republicans continue. While a package at some point is likely, it very likely won’t come before the election in early November.
In overnight news, the Euro zone composite purchasing managers index (PMI) for October came in at 49.4 versus 50.4 in September. The October number was just slightly above market expectations.
In other news, Reuters today reported world central banks became net sellers of gold for first time in a decade in the third quarter. The report said gold demand is down 30%, year-on-year, mostly due to the Covid-19-induced damage to the world economies. Jewelry fabrication remained the worst impacted sector.
The important outside markets early today see the U.S. dollar index weaker. Nymex crude oil prices are higher and trading around $40.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.84% today.
U.S. economic data due for release Friday includes the U.S. flash manufacturing purchasing managers index (PMI), and the flash services PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have the firm overall near-term technical advantage. The 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 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 this week’s high of 3,496.50 and then at the October high of 3,541.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,437.00 and then at this week’s low of 3,402.50. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 11,779.25 and then at this week’s high of 11,950.50. On the downside, shorter-term support is seen at this week’s low of 11,511.00 and then at 11,400.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading after hitting a 4.5-month low on Thursday. Bears are in near-term control. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 172 11/32 and then at 173 even. Shorter-term support lies at this week’s low of 171 25/32 and then at 171 16/32. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading after hitting a four-month low Thursday. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 138.13.0 and then at Thursday’s high of 138.20.0. Shorter-term technical support lies at this week’s low of 138.05.0 and then at 138.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are firmer. Bulls are working on a price uptrend on the daily chart. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above 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 this week’s high of 1.1894 and then at 1.1941. Shorter-term support is seen at the overnight low of 1.1799 and then at 1.1773. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly firmer in early U.S. trading. Trading remains choppy. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $41.00 and then at this week’s high of $41.90. Look for sell stops just below technical support at this week’s low of $39.71 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are mixed to higher in early U.S. pre-market trading. Grain market bulls remain in solid technical control amid strong uptrends in place on the charts. There are no early clues to suggest that market tops are close at hand. The path of least resistance for prices remains sideways to higher.
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