Thursday, November 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. The stock market bulls are keeping the major indexes buoyant amid upbeat corporate earnings reports. However, inflation worries continue on the rise. Rallies in many raw commodity futures markets on Wednesday underscored notions that commercial end-users are already “stocking up” ahead of time, in order to beat perceived likely future price increases. That only makes supplies shorter and more inclined to price increases.
The key outside markets today see the U.S. dollar index weaker after hitting a 15-month high on Wednesday. Nymex crude oil prices are slightly lower and trading around $78.25 a barrel. Oil prices overnight hit a six-week low as it appears the crude market has put in a near-term top. There is talk the U.S. and China may tap their strategic oil reserves to help ease higher gasoline prices. The 10-year U.S. Treasury note yield is presently fetching 1.58%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, leading economic indicators, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading and near this month’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. 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 4,711.25 and then at 4,725.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,667.00 and then at last week’s low of 4,625.25. 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 and near this month’s 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 bullish early today. Shorter-term technical resistance is seen at the contract high of 16,448.50 and the at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Wednesday’s low of 16,270.00 and then at this week’s low of 16,092.25. 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 higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 161 4/32 and then at 161 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 160 even and then at this week’s low of 159 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly higher in early U.S. trading. 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 is seen at the overnight high of 130.21.5 and then at this week’s high of 130.27.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.08.0 and then at the October low of 129.31.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are higher in early U.S. trading on short covering after hitting a 16-month low on Wednesday. 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.1400 and then at this week’s high of 1.1469. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1300 and then at this week’s low of 1.1268. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading and hit a six-week low. Bulls have faded badly recently to suggest a market top is in place. 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 bearish early today. Look for buy stops to reside just above technical resistance at $79.00 and then at $80.00. Look for sell stops just below technical support at the overnight low of $77.08 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were higher overnight. Grain bulls have momentum. On tap today is the weekly USDA export sales report. The soybean meal futures market is trending solidly higher, which signals a market bottom is in place for soybeans. Corn and wheat bulls have the near-term technical advantage amid price uptrends in place on the daily charts. Wheat is the grain market leader on the upside, at present.
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