Thursday, November 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to mostly firmer in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs overnight.
The market place is still digesting the Federal Reserve’s Open Market Committee (FOMC) meeting that ended Wednesday afternoon. The Fed announced its tapering of monthly bond buying, as expected. It’s also expected the tapering will wind down next summer. There were no big surprises in the FOMC statement or Fed Chair Powell’s press conference, which suggested the marketplace had pretty well dialed in the outcome. Powell did suggest that U.S. interest rate hikes do not necessarily have to come after tapering winds down–and that leaned a little dovish and may have helped lift gold prices off their daily lows Wednesday.
On tap Thursday is the regular monetary policy meeting of the Bank of England. The BOE has hinted recently that its monetary policy will also start to tighten due to inflationary pressures.
Speaking of inflation, it’s running hotter in the Euro zone. The zone’s September producer price index was reported up 2.7% from August and up a whopping 16.0%, year-on-year.
Traders are awaiting Friday’s important U.S. employment situation report for October. The key non-farm payrolls component of that report is expected to rise 450,000 compared to a rise of 194,000 in the September report.
The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.574%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, preliminary productivity and costs, the global services PMI, and the monthly U.S. chain store sales index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,662.00 and then at 4,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Wednesday’s low of 4,613.00 and then at this week’s low of 4,586.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are up in early U.S. trading and hit another record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-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 overnight record high of 16,216.00 and then at 16,300.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Wednesday’s low of 15,935.25 and then at and then at this week’s low of 15,768.50. Sell stops likely reside 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 slightly 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 bullish early today. Shorter-term technical resistance is seen at 161 even and then at this week’s high of 161 14/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 18/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are a bit higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance is seen at 131.00.0 and then at this week’s high of 131.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.18.0 and then at this week’s low of 130.12.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are solidly lower in early U.S. trading. Bears have the solid 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. 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 1.1600 and then at this week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at the October low of 1.1537 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bulls still have the near-term technical advantage but have become wobbly this week. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above 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 Wednesday’s high of $83.08 and then at $84.00. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed to firmer overnight. On tap today is the weekly USDA export sales report. Corn and wheat bulls still have the technical advantage. Soybeans continue to struggle.
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