Thursday, October 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly higher in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. U.S. corporate earnings reports are featured this week.
The U.S. data point of the day is the producer price index report for September, which is seen up 0.6% versus a 0.7% rise reported in August. The U.S. consumer price index report on Wednesday ran a little hotter than expected. Meantime, in China, its producer price index in September rose a record 10.7%, year-on-year. The August reading was up 9.5%. Recent inflation gauges from the major world economies are suggesting higher inflation may be more than just transient, as has been repeatedly suggested by Federal Reserve Chairman Jay Powell.
Gold prices hit a four-week high overnight and are trading above $1,800.00 an ounce. It appears gold traders may be finally realizing that rising inflationary pressures are bullish for metals, as history shows.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures are higher and trading around $81.30 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.54%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report and the weekly DOE liquid energy stocks report. Several Federal Reserve, IMF and World Bank officials are scheduled to speak today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are up in early U.S. trading. Prices are still in a five-week-old downtrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,400.00 and then at this week’s high of 4,407.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,354.00 and then at this week’s low of 4,317.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading. Prices are still in a five-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the October high of 15,001.25 and then at 15,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 14,767.50 and then at this week’s low of 14,585.50. 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 higher on more short covering after hitting a nearly four-month low on Monday. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 160 even and then at 160 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 6/32 and then at 158 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher on more short covering after hitting a nearly four-month low on Monday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance is seen at this week’s high of 131.15.5 and then at 131.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.06.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are higher in early U.S. trading, on more short covering. Bears still 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1637 and then at the October high of 1.1656. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1600 and then at this week’s low of 1.1537. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid near-term technical advantage. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $82.18 and then at $83.00. Look for sell stops just below technical support at the overnight low of $80.41 and then at this week’s low of $79.42. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were higher overnight, on corrective bounces from Wednesday’s selling pressure. Corn and soybean bears have the firm near-term technical advantage. Wheat bulls remain in technical command. Harvesting of the U.S. corn and soybean crops has progressed rapidly and that’s bearish and will also keep pressure on corn and soybeans. It’s likely that the bearish corn and soybean markets will limit the upside in wheat for the near term.
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