Tuesday, October 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins. Dour comments on the global economic/political outlook from the respected chief of JP Morgan, Jamie Dimon, as well as an escalation in the Russia-Ukraine war, are keeping a “risk-off” trader and investor mentality in the general marketplace.
It appears the safe-haven assets of choice at present are the U.S. dollar and U.S. Treasuries. The greenback has been appreciating and U.S. bond yields have been rising. Meantime, the price of gold, which is also considered a safe-haven store of value, has been falling.
The U.K. government bond market is still roiled, as the Bank of England was forced to stepped in to buy inflation-linked bonds to its bond-buying program. There are worries U.K. pension funds could be lost in any more serious U.K. bond market rout.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $89.00 a barrel. The U.S. Treasury 10-year note yield is presently fetching 3.956%.
Traders are looking ahead to key U.S. inflation reports on Wednesday and Thursday mornings. The producer price index report for September is out Wednesday and the consumer price index report for September is out Thursday. The consumer price index is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the NFIB small business index, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage amid a seven-week-old price downtrend in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,636.00 and then at this week’s high of 3,667.50. Support for active traders is seen at the October low of 3,571.75 and then at 3,525.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are slightly down and hit a contract low 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 bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 11,136.50 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight contract low of 10,853.25 and then at 10,600.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering. 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 125 26/32 and then at 126 even. Shorter-term support lies at Monday’s contract low of 123 21/32 and then at 123 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer 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 neutral to bearish early today. Shorter-term resistance lies at Monday’s high of 111.21.5 and then at 112.00.0. Shorter-term technical support lies at the contract low of 110.19.0 and then at 110.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears still 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 neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of .9803 and then at last Friday’s high of .9867. Shorter-term support is seen at the overnight low of .9718 and then at .9650. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $91.35 and then at this week’s high of $93.64. Look for sell stops just below technical support at $87.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were weaker in overnight trading, on corrective pullbacks from Monday’s gains and amid keener risk aversion in the general marketplace. Corn and wheat bulls have the firm 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. On tap today is the weekly USDA export inspections report.
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