Monday, October 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are set to open the New York day session mixed to firmer. The U.S. Treasury markets and U.S. government are closed Monday for the Columbus Day holiday, while Canadian markets are closed for the Thanksgiving holiday.
Three weeks before the U.S. elections former vice president Joe Biden is widening his lead in the polls over President Donald Trump. Also, there is now talk in the marketplace that the Democrats could take the Senate—possibly having all three branches of government be Democrat-controlled. This possibility has not rattled the stock market despite such a scenario likely meaning higher taxes for citizens and businesses. The tone of the marketplace at present suggests traders and investors may be more relieved that a suspected solid loss by Trump would make for a less uncertain exchange of power, as opposed to a very close election result that Trump could more easily contest if he lost.
In other news, the U.S. Congress does not appear to be getting closer to a Covid-19-related stimulus package for Americans.
Covid-19 continues to spread at an alarming rate in parts of Europe, including the U.K.
China has relaxed its rules on the trading of its currency, the yuan—specifically shorting it, suggesting China wants to slow the appreciation of its currency, which hit a 1.5-year high against the U.S. dollar on Friday.
The important outside markets early today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $40.00 a barrel.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit a six-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 3,500.00 and then at 3,525.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,464.25 and then at Friday’s low of 3,445.25. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are higher and hit a six-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at 11,900.00 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,687.75 and then at Friday’s low of 11,552.50. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly higher in early U.S. trading on short covering after hitting a four-month low last week. 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 the overnight high of 174 14/32 and then at 175 even. Shorter-term support lies at last week’s low of 173 10/32 and then at 173 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are near steady in early U.S. trading. 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 139.00.0 and then at 139.04.5. Shorter-term technical support last week’s low of 138.20.5 and then at the September low of 138.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. 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 neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.1847 and then at 1.1900. Shorter-term support is seen at Friday’s low of 1.1773 and then at last week’s low of 1.1725. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-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 the overnight high of $40.45 and then at last week’s high of $41.47. Look for sell stops just below technical support at the overnight low of $39.80 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are higher in early U.S. pre-market trading. Grain market bulls are on a run and remain in solid technical control amid price uptrends in place. Speculators are becoming more interested in grain futures on the long side, as technical have become much more bullish this week. Focus is on U.S. harvest results, which are coming in varied but mostly good.
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