Tuesday, September 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European shares mostly lower and Asian shares mostly higher. U.S. stock indexes are pointed to lower openings when the New York day session begins. Risk aversion remains elevated among traders and investors. Marketplace focus is on the Federal Reserve’s FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to remain aggressively hawkish and raise the key U.S. Fed funds rate by 0.75% in the Fed’s effort to tamp down problematic price inflation. Sweden’s central bank today raised its key interest rate by a full 1.0%. The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.
The key outside markets today see Nymex crude oil prices slightly up and trading around $84.00 a barrel. The U.S. dollar index is slightly firmer in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.535%. The 2-year U.S. Treasury note yield climbed to 3.979%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes, and new residential construction.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,936.25 and then at 3,981.25. Support for active traders is seen at Monday’s low of 3,846.25 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,092.50 and then at 12,268.75. On the downside, shorter-term support is seen at last week’s low of 11,778.50 and then at 11,600.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: 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 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 131 4/32 and then at 131 25/32. Shorter-term support lies at the contract low of 130 5/32 and then at 129 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower and hit a contract low 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 bearish early today. Shorter-term resistance lies at the overnight high of 114.17.0 and then at this week’s high of 114.25.5. Shorter-term technical support lies at 114.00.0 and then at 113.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0116 and then at 1.0175. Shorter-term support is seen at 1.0000 and then at the contract low of .9935. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly lower 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 $87.00 and then at $88.00. Look for sell stops just below technical support at $84.00 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were higher overnight. Keener risk aversion in the general marketplace has the grain market bulls tentative. Key “outside markets” for the grains are also in a generally bearish posture as crude oil prices are trending lower and the U.S. dollar index is trending higher. Corn and soybean market bulls have the overall near-term technical advantage. Wheat bears still have the slight overall near-term technical edge.
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