Friday, October 20–Jim Wyckoff’s morning markets report
Asian and European stocks were mostly lower overnight. U.S. stock indexes are pointed to weaker openings when the New York day session begins. Heightened tensions in the Middle East are sapping trader and investor risk appetite late this week and heading into the weekend. Rising bond yields are also squelching the equities market bulls this week.
Reports overnight said a U.S. warship had to intercept missiles fired at it from Yemen.
The U.S. marketplace highlight of the day Thursday was Federal Reserve Chairman Jerome Powell’s speech to the Economic Club of New York in the afternoon. Powell said U.S. inflation is still too high and slower economic growth is likely needed to bring it down. His comments were nothing new and did little to move the needle on the markets.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are higher and trading around $90.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.948% after briefly pushing above 5.0% on Thursday.
There is no major U.S. economic data due for release Friday.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker and hit a two-week low in early U.S. trading. The 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 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 4,325.00 and then at Thursday’s high of 4,366.50. Support for active traders is seen at 4,250.00 and then at the October low of 4,235.50. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are weaker and hit a two-week low 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 15,000.00 and then at Thursday’s high of 15,138.25. On the downside, shorter-term support is seen at the overnight low of 14,796.00 and then at 14,700.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer on short covering after hitting a contract low Thursday. 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 early today. Shorter-term technical resistance is seen at Thursday’s high of 109 15/32 and then at Wednesday’s high of 110 12/32. Shorter-term support lies at the contract low of 107 22/32 and then at 107 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are higher on short covering after hitting a contract low Thursday. 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 early today. Shorter-term resistance lies at 106.00.0 and then at Wednesday’s high of 106.15.5. Shorter-term technical support is seen at the contract low of 105.10.5 and then at 105.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears are in firm overall near-term technical control. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0641 and then at the October high of 1.0668. Shorter-term support is seen at 1.0523 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher and hit a three-week high in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above 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 $91.00 and then at $92.00. Look for sell stops just below technical support at $89.00 and then at $88.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed in overnight trading. Keener risk aversion in the marketplace late this week has most of the grain market bulls standing on the sidelines. Technicals are overall bearish for corn, wheat and soybeans. However, the meal market is on fire, to suggest soybeans will also see some more upside price action in 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