Wednesday, November 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to weaker openings when the New York day session begins. Traders and investors are a bit more risk-averse at mid-week–paying more attention to the prospects for rising and even problematic price inflation. China’s producer price index on Wednesday was reported up 13.5% in October, year-on-year, and up from a 10.7% rise in September. That is the fastest factory gate price rise on recent record. Extreme weather and coal shortages are being reflected in China’s rising PPI.
Meantime, the U.S. consumer price index for October is due out today and is expected to come in at up 0.6% from September and up 5.9%, year-on-year. If those numbers are met or exceeded it would be the highest U.S. CPI reading in over 30 years. Tuesday’s U.S. producer price index showed a rise of 8.6%, year-on-year.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $83.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.481%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly jobless claims report, real earnings, monthly wholesale trade, the weekly DOE liquid energy stocks report and the monthly Treasury budget statement. Thursday is a U.S. federal holiday and thus the weekly jobless claims report is out today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading but not far below last week’s record high. 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 bearish early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,711.25 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,650.00 and then at 4,625.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are lower in early U.S. trading. Prices last week hit a record high. 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 bearish early today. Shorter-term technical resistance is seen at 16,300.00 and the at the contract and record high of 16,448.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 16,000.00 and then at and then at 15,850.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 163 22/32 and then at this week’s high of 164 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at 163 even and then at 162 9/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are 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 bearish early today. Shorter-term resistance is seen at the overnight high of 131.25.0 and then at last week’s high of 131.30.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.08.0 and then at 131.00.0. 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 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 last week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at the November low of 1.1520 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 weaker in early U.S. trading. Bulls have the firm near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is above 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 the overnight high of $84.97 and then at the October high of $85.41. Look for sell stops just below technical support at Tuesday’s low of $81.78 and then at this week’s low of $81.05. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were mixed overnight. Tuesday’s monthly USDA supply and demand report was a bit bullish for soybeans. However, key for soybeans is the soybean meal market. Meal is now trending higher, which begins to signal a market bottom is close at hand for soybeans. Corn and wheat bulls have the near-term technical advantage, but corn bulls have faded.
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