Monday, October 9–Jim Wyckoff’s morning markets report
Asian and European stocks were mostly lower overnight. U.S. stock indexes are pointed to lower openings when the New York day session begins. The marketplace got a rare, major geopolitical shock over the weekend when Hamas raided Israel, killing hundreds of civilians and taking hostages. Israel retaliated harshly and declared war on Hamas. This is the largest act of violence seen in Israel in 50 years. Risk aversion is high to start the trading week, as the ramifications of the weekend attack by Hamas are huge, both politically and economically. The U.S. is building up its military presence in the Middle East region.
The major Middle East conflict will likely in the coming months impact major economies, including affecting central bank policies. There is also speculation the Israel war with Hamas may even impact the U.S. Congress and the process of selecting a new Speaker of the House of Representatives.
The U.S. government is closed for a federal holiday Monday, so the U.S. Treasury market is closed. However, most markets are open today, including the U.S. Treasury futures markets.
Gold prices are sharply higher on safe-haven demand, while the U.S. dollar and U.S. Treasuries are also seeing “flight-to-quality” buying. Nymex crude oil prices are sharply higher and trading around $85.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.795%.
U.S. economic data due for release Monday includes the employment trends index.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are in a 2.5-month-old downtrend on the daily bar chart. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 4,358.50 and then at 4,400.00. Support for active traders is seen at 4,270.00 and then at the October low of 4,235.50. 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 neutral early today. The 4-day moving average is above the 9-day. Both are below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last week’s high of 15,160.25 and then at 15,300.00. On the downside, shorter-term support is seen at 14,800.00 and then at the September low of 14,586.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading and not far above Friday’s contract low. 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 neutral to bullish early today. Shorter-term technical resistance is seen at Tuesday’s high of 111 even and then at 112 even. Shorter-term support lies at 110 even and then at the contract low of 109 20/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are 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 bullish early today. Shorter-term resistance lies at the overnight high of 107.20.5 and then at last week’s high of 107.29.5. Shorter-term technical support is seen at 107.00.00 and then at 106.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
The December Euro currency futures are lower in early U.S. trading. Prices are trending lower and bears are in solid near-term technical control. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0632 and then at 1.0700. Shorter-term support is seen at 1.0500 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are sharply up in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $87.24 and then at $88.00. Look for sell stops just below technical support at the overnight low of $84.67 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 7.0
Grain futures prices were higher in overnight trading. Harvesting of soybeans and corn is in full swing and that is a bearish seasonal factor amid commercial hedge selling. Technicals are bearish for corn, wheat and soybeans. USDA today is closed, so no reports today.
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.