Tuesday, November 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to lower in overnight trading. The U.S. stock indexes are pointed to lower openings when the New York day session begins. Risk aversion is keener Tuesday as there are still major unknowns regarding the new Omicron strain of the coronavirus, including how effective current vaccines are at fighting it. Regeneron Tuesday morning said its antibody drug is less effective on the Omicron strain. Moderna said Omicron’s many mutations suggest a new vaccine will be needed.
Traders and investors will closely monitor comments from Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen in their testimony to the Senate Banking Committee today—especially in light of the new Omicron scare. The new coronavirus strain is prompting new worries about major economies once again being crimped by business lockdowns and reduced consumer demand. The Federal Reserve could be forced to dial back its recently announced tapering of its bond-buying program, due to concerns about another slowdown in the U.S. economy if Omicron surges in the U.S.
Gold and U.S. Treasuries are benefiting Tuesday from safe-haven demand.
In other overnight news, the Euro zone’s consumer price index for November came in hot, at up 4.9% year-on-year, for the highest reading in 30 years. Energy prices were up 27.4%, year-on-year.
The key “outside markets” see Nymex crude oil prices lower and trading around $68.30 a barrel. The U.S. dollar index is solidly lower. Meantime, The yield on the U.S. Treasury 10-year note is presently fetching 1.443%, which is well down from the 1.529% reading Monday.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales reports, the S&P/Case-Shiller home price index, the ISM Chicago business survey, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are solidly lower in early U.S. trading. Bulls have faded to suggest a near-term market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 4,650.00 and then at Monday’s high of 4,669.75. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 4,577.25 and then at 4,550.00. Sell stops likely reside below those levels. 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 below the 9-day and 18-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 the overnight high of 16,441.00 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 16,150.00 and then at last week’s low of 15,988.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are solidly higher in early U.S. trading and hit a three-week high. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 163 21/32 and then at the November high of 164 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 2/32 and then at this week’s low of 161 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
December U.S. T-Notes: Prices are solidly higher and hit a seven-week high in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance is seen at the overnight high of 132.01.5 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.16.0 and then at 131.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The March Euro currency futures are solidly higher in early U.S. trading on 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. 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 1.1406 and then at 1.1450. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1319 and then at Monday’s low of 1.1292. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower and hit a 2.5-month low in early U.S. trading. 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 $70.00 and then at the overnight high of $71.22. Look for sell stops just below technical support at the overnight low of $67.06 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures are solidly lower in overnight trading. There is again keener risk aversion in the marketplace that is pressuring the raw commodity market sector, including the grains. As long as the uncertainty persists in the general marketplace, grains will likely be under selling pressure.
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