Tuesday, November 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are headed for higher openings when the New York day session begins. Stock traders are done with the historically rocky months of September and October, after having a very good October, with near-term price uptrends in place on the daily charts for the indexes.
Global stock and commodity markets were buoyed by upbeat reports coming out of China. China stock markets rallied Tuesday on reports the Chinese government has a plan to phase out its “zero covid” policies by as soon as March. China stock prices did back off their highs on reports Foreign Minister Zhao Lijian said he is not aware of the matter. China is the world’s second-largest economy and if it gets rolling again, such would be significantly bullish for stocks and commodities.
In other overnight news, Australia’s central bank raised one of its main interest rates by 0.25%.
The World Gold Council has reportedly seen substantial, unreported buying of the yellow metal, as central bank bullion purchases hit a record in the third quarter. Reports said 400 metric tons of gold were bought by central banks last quarter, pushing purchases up to their highest since 1967. “Meantime, ETF selling amid soaring U.S. real yields has pushed gold prices lower, while central bankers have been meeting depressed prices with open arms,” said broker SP Angel in an email dispatch Tuesday morning. The WGC reports Turkey and Qatar both ramped up purchases, with China and Russia also expected to be partaking, although their purchases are not reported.
Traders are looking ahead to the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. Traders and investors also want to see what comments the FOMC and Powell make regarding the future path of U.S. monetary policy—specifically, when the Fed will back off the accelerator on aggressively raising interest rates.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail reports, the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, construction spending and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading and near last week’s five-week high. A fledgling price uptrend is in place on the daily bar chart to suggest a market bottom is in place. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 3,924.25 and then at 3,950.00. Support for active traders is seen at this week’s low of 3,872.25 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading. 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 October high of 11,734.00 and then at 12,000.00. On the downside, shorter-term support is seen at this week’s low of 11,367.25 and then at 11,200.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are solidly higher in early U.S. trading. Prices are still in a three-month-old downtrend on the daily bar chart. Bears have the firm overall technical advantage. 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 last week’s high of 122 25/32 and then at 123 even. Shorter-term support lies at 122 even and then at the overnight low of 120 25/32. Wyckoff’s Intra-Day Market Rating: 6.5
December U.S. T-Notes: Prices are sharply higher in early U.S. trading. Prices are still in a three-month-old downtrend on the daily bar chart. Bears have the firm overall technical advantage. 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 bullish early today. Shorter-term resistance lies at last week’s high of 111.31.0 and then at 112.16.0. Shorter-term technical support lies at 111.00.0 and then at the overnight low of 110.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The December Euro currency futures are firmer in early U.S. trading. Bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily chart to suggest a market bottom is in place. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at last Friday’s high of 1.0034 and then at 1.0100. Shorter-term support is seen at this week’s low of .9908 and then at .9850. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above 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 bullish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at $91.00. Look for sell stops just below technical support at $86.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed to weaker in overnight trading. The grain Monday rallied on news Russia suspended the Ukraine grain-shipping deal with the U.N. and Ukraine. Also bullish for the grains is news China may be considering phasing out its zero Covid policies. Grain market bulls are disappointed their markets are not responding in stronger fashion to those two major fundamentals. Corn bulls have the overall near-term technical advantage. Soybeans bulls now have the slight chart edge. Wheat bulls and bears are on a level overall near-term technical playing field.
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