Monday, September 30–Jim Wyckoff’s Morning Markets Report
Asian stocks were mixed to mostly weaker, while European stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.
Today is the last trading day of the month and of the quarter, which makes it an extra important day from a technical perspective.
There is a bit less risk aversion in the marketplace Monday, following markets being roiled last Friday by reports the U.S. was considering limiting U.S. investors’ investment in China, including the U.S. stock exchanges de-listing Chinese companies. Weekend reports then said the Trump administration is not considering such moves.
Asian stock markets saw some selling pressure after the 17th weekend in a row of demonstrations in Hong Kong. This past weekend is being called the worst, with many arrests after protestors bombarded police with everything from bricks to firebombs.
China’s economy got some slightly upbeat news Monday, as the official manufacturing purchasing managers index rose to 49.8 in September from 49.5 in August. It was the fifth month in a row with a reading below 50.0, which suggests contraction in the sector. The September PMI report did come in slightly above market expectations.
In other overnight news, the Euro zone jobless rate in August was reported at 7.4% versus 7.5% in July. The August rate was the lowest in 11 years.
Nymex crude oil prices are lower and trading around $55.25 a barrel. Meantime, the U.S. dollar index is higher early today.
U.S. economic data due for release Monday includes the international investment position, the ISM Chicago business survey, and the Texas manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage. However, there is very strong overhead resistance at the recent highs, scored in July and September. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 3,000.00 and then at last week’s high of 3,012.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,946.25 and then at 2,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the overall technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below 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 7,800.00 and then at 7,842.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,705.75 and then at last week’s low of 7,641.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 162 14/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 161 17/32 and then at 161 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at the overnight low of 130.01.0 and then at 129.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 130.12.5 and then at 130.16.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer and close to last week’s contract high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the contract high of 98.955 and then at 99.250. Shorter-term support is seen at the overnight low of 98.710 and then at 98.450. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Bulls have faded badly recently. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is even with 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 $56.00 and then at the overnight high of $56.57. Look for sell stops just below technical support at last week’s low of $54.75 and then at $54.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were higher in overnight trading. Corn was up around 1 cent, soybeans up about 8 cents and wheat around 3 cents higher. Short covering is featured amid ideas harvest lows in the grains are in place. USDA will release its quarterly grain stocks report on Monday. Average trade estimates are for around .98 billion bushels of US soybean stocks, 2.3 billion bushels of US wheat, and 2.4 billion bushels of corn. The corn and soybean stocks in this report could be some of the biggest on record. Traders will also closely examine today’s weekly USDA export inspections report. The strong US dollar on the foreign exchange market (the US dollar index hit a new high for the year Friday) is an underlying negative for the US grains, making them more expensive on the world market. US grain exports have already been anemic and the strong greenback won’t help matters.
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