Global Stock Markets Firmer; China’s Party Congress On Deck

Monday, October 16–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight. Many world stock indexes are at or near record or multi-year highs. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.

Gold prices are modestly up and poked to a three-week high overnight. The yellow metal bulls have the near-term technical advantage, which means the path of least resistance for prices will be sideways to higher in the near term.

The U.S. dollar index is firmer in early U.S. trading Friday. The other key outside market sees Nymex crude oil futures prices higher and trading above $52.00 a barrel. The oil bulls have the overall the near-term technical advantage.

China this week starts its twice-a-decade Party Congress meetings, in which major economic and cultural planning initiatives are laid out for the next five years.

In other overnight news, the Euro zone reported its exports were up 2.5% in August from July, while imports were up by only 0.4%.

U.S. economic data due for release Monday is light and includes the Empire State manufacturing survey.

–Jim

U.S. STOCK INDEXES

S&P 500 December e-mini futures: Prices are slightly higher in early U.S. trading, and poked to another contract and record high overnight. The market is still way overbought and due for a decent downside correction soon. The 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 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 the contract high of 2,556.50 and then at 2,565.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,539.25 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index December futures: Prices are slightly up and hit another contract and record high overnight. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 6,115.00 and then at 6,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,075.00 and then at last week’s low of 6,039.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are slightly lower in early U.S. trading, on some profit taking from recent good gains. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 last week’s high of 154 5/32 and then at 154 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 23/32 and then at 153 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

December U.S. T-Notes: Prices are weaker in early U.S. trading, on profit taking from recent good gains. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above with 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 last week’s high of 125 25.5 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.18.0 and then at 125.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly higher in early U.S. trading. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 93.250 and then at 93.500. Shorter-term support is seen at last week’s low of 92.635 and then at 92.500. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

November Nymex crude oil prices are higher and hit a three-week high in early U.S. trading. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the September high of $52.86 and then at $53.00. Look for sell stops just below technical support at the overnight low of $51.35 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Grain futures markets were mixed overnight. Recent price action suggests the corn market does not have much downside potential and may have put in a bottom. Soybean bulls have momentum to suggest the near-term price uptrend can be sustained. And wheat bears continue to struggle. Still, if corn and soybeans can rally, wheat will follow.