Tuesday, September 24–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Trader and investor attitudes are a bit more upbeat today, but still not close to being full-speed-ahead risk-on.
There’s been a change of thinking in the marketplace regarding last week’s meeting between U.S. and Chinese trade officials in Washington, D.C. Traders initially deemed the early departure back home of China’s trade delegation as a sign the talks did not go well. The Chinese were scheduled to visit U.S. farms, but the visits were abruptly cancelled. However, language coming from both sides since last Friday has been very upbeat and the trade negotiations are set to continue. The marketplace is now reading this situation as a positive for an eventual U.S.-China trade agreement.
The specter of a very anemic European Union collective economy continues to cloud the European marketplace. Dour manufacturing data coming out of Germany Monday suggests the biggest economy in the Euro zone is headed toward recession.
China’s central bank chief on Tuesday said the People’s Bank of China will not follow the monetary-policy-easing paths of the central banks of the West, and that China’s present interest rates are appropriate.
Nymex crude oil prices are lower and trading around $58.00 a barrel. The other key outside market today sees the U.S. dollar index trading slightly up.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly up 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 neutral early today. The 4-day moving average is below 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 overnight high of 3,012.25 and then at the September high of 3,025.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,980.75 and then at 2,970.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls have the solid overall technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 7,904.75 and then at 7,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 7,807.75 and then at 7,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly up in early U.S. trading. Bulls have upside momentum. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Monday’s high of 162 16/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 161 6/32 and then at Monday’s low of 160 16/32. Sell stops likely reside just below those levels. 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 neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term support lies at the overnight low of 129.29.5 and then at 129.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at Monday’s high of 130.13.5 and then at 130.20.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 98.455 and then at 98.670. Shorter-term support is seen at Monday’s low of 98.070 and then at last Friday’s low of 97.735. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage. But it still appears the September spike high is a near-term peak. Prices are in a six-week-old uptrend on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $58.49 and then at $59.00. Look for sell stops just below technical support at Monday’s low of $57.37 and then at $57.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were steady to lower in overnight trading. Corn was down around 2 cents, soybeans near unchanged and wheat 3 to 5 cents down. Weekly USDA crop progress reports out Monday afternoon showed the corn condition rating at 57% good to excellent. Corn harvest progress was at 7% complete. The soybean condition rating was 54% good to excellent. US spring wheat harvest was at 87% complete and winter wheat planting at 22% complete. Recent price action and the technical charts still suggest “harvest lows” are in place for grain futures prices. Weather in the US Corn Belt has been too wet in many areas and too dry in a few areas, which is prompting some concerns about crop quality as harvest begins. The northern U.S. plains and the Canadian prairies have also been too wet for ideal crop conditions. This week the harvesting pace for U.S. soybeans and corn will start to pick up significantly.
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