Wednesday, September 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. U.S. stock indexes are set to open the New York day session lower. The first U.S. presidential debate between President Donald Trump and Joe Biden that took place in Cleveland, Ohio Tuesday night produced unprecedented acrimony but probably did not move the needle much regarding changing voters’ minds. Still, the rancor from both sides that included President Trump saying he did not trust the mail-in voting process and not committing to urge his supporters to remain calm if he lost the election served to inject more uncertainty into an already unsettled marketplace.
Rising Covid-19 infections in major countries heading into colder weather and more inside activities in the Northern Hemisphere have raised more concerns about a second wave of the virus again shutting down businesses and damaging economies.
The U.S. government slapped a $920 million fine on investment bank JP Morgan Tuesday, as the firm admitted to manipulating precious metals and Treasury markets. That’s the largest fine ever levied by the U.S. for the manipulation, called “spoofing,” in which big trading orders are entered but then quickly cancelled. This news can be seen as at least a partial redemption for a vocal group of metals market watchers who have claimed for many years that JP Morgan has had a heavy hand in manipulating the gold market.
The important outside markets early today see the U.S. dollar index firmer after being under pressure Monday and Tuesday. Nymex crude oil prices are weaker and trading around $38.85 a barrel, as the oil market bulls are fading this week. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.65% today.
The U.S. economic data point highlight of the week will be Friday morning’s monthly jobless report for September from the Labor Department. The key non-farm payrolls number is forecast at up 875,000 and the unemployment rate is forecast at 8.2%. Traders will closely examine today’s monthly ADP national employment report.
Today is the last trading day of the month and of the quarter, making it a more important day from a technical chart perspective.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, revised corporate profits and the third estimate of second-quarter GDP. Also on tap is the ISM Chicago business survey, pending home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls have stabilized prices at mid-week. 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 even with 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 3,363.00 and then at 3,385.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,287.50 and then at 3,250.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below 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 11,448.75 and then at 11,500.00. On the downside, shorter-term support is seen at this week’s low of 11,140.25 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls were working on a near-term price uptrend. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 177 12/32 and then at 178 even. Shorter-term support lies at this week’s low of 176 19/32 and then at 176 even. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 139.26.0 and then at the September high of 139.29.0. Shorter-term technical support lies at the overnight low of 139.20.5 and then at this week’s low of 139.16.5. 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. Prices are trending lower on the daily chart. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1773 and then at 1.1800. Shorter-term support is seen at last 1.1680 and then at week’s low of 1.1630. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are down in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $39.25 and then at $40.00. Look for sell stops just below technical support at this week’s low of $38.41 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mixed in early U.S. pre-market trading. On tap today is the USDA quarterly grain stocks report, which is not expected to be bullish, but will not likely be a bit markets mover. Grain market bulls have faded a bit recently but still have the overall near-term technical advantage in all three markets. Focus remains on U.S. harvest results, which are coming in better than expected so far. Grain traders, keep a close eye on the crude oil market, because if that market falters then such would be a bearish omen for the grains.
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