Thursday, September 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins. Risk aversion is still elevated late this week after Russian President Putin mobilized more troops to fight his war with Ukraine, and also implied he could use his nuclear weapons if Russia’s integrity is threatened.
The marketplace is digesting this week’s FOMC meeting that saw the U.S. Federal Reserve raise its main interest rate by 0.75%, which is what most expected. Fed Chairman Powell as his press conference after the FOMC statement was released Wednesday afternoon said it’s likely the Fed will do two more 75 basis-point hikes this year. He also said a “soft landing” for the U.S. economy is not likely because the Fed must stamp out problematic price inflation. A Barron’s news headline today reads, “The Fed signals more pain.”
In overnight news, Japan’s central bank intervened in the foreign exchange market for the first time in 24 years by buying the yen for U.S. dollars. The yen slumped when Japan’s central bank said its interest rates would remain near zero for the next couple years.
The key outside markets today see Nymex crude oil prices slightly higher and trading around $83.25 a barrel. The U.S. dollar index is higher and pushed to another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.54%. The 2-year Treasury note yield is 4.09%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, leading indicators, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit a nine-week low overnight. 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 this week’s high of 3,936.25 and then at 3,981.25. Support for active traders is seen at the overnight low of 3,766.75 and then at 3,741.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading and hit a nine-week low overnight. 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 neutral early today. Shorter-term technical resistance is seen at 11,900.00 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,550.00 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are a bit firmer in early U.S. trading, on short covering. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 131 10/32 and then at 132 even. Shorter-term support lies at the overnight low of 130 5/32 and then at the contract low of 129 6/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a six-week-old downtrend on the daily bar chart and 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 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 Wednesday’s high of 114.10.0 and then at Tuesday’s high of 114.17.0. Shorter-term technical support lies at the contract low of 113.09.5 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are lower and hit a contract low in early U.S. trading. Bears have the strong overall near-term technical advantage. 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 bearish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.0040 and then at this week’s high of 1.0116. Shorter-term support is seen at the overnight contract low of .9868 and then at .9800. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
November Nymex crude oil prices are a bit higher in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $85.00 and then at this week’s high of $86.68. Look for sell stops just below technical support at this week’s low of $81.73 and then at the September low of $80.89. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed overnight. Risk aversion in the marketplace late this week is squelching the grain market bulls. On tap today is the weekly USDA export sales report. Corn and soybean market bulls have the overall near-term technical advantage. Wheat bulls have the slight overall near-term technical edge and have restarted price uptrends on the daily charts.
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