Little Risk Aversion in Marketplace as Historically Turbulent Month of Sept. Winds Down

Friday, September 28–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There is still little risk aversion in the marketplace at present, as evidenced by recent strength in the U.S. stock market that sees the major indexes not far below their recent record highs.

Today is the last trading day of the week, of the month, and of the quarter, which makes it an extra important day from a technical chart perspective. Also, late this week could be seeing portfolio and fund managers squaring their positions for “window-dressing” purposes as the month and the quarter wind down.

In overnight news, inflation in the Euro zone heated up a bit. Consumer prices in the region rose at a 2.1% annual rate in September. The reading was the highest in a year and a half.

Focus in Europe is on the new Italian government’s economic plans to address its fiscal and financial problems, which are required by European Union law. Many believe Italian lawmakers won’t comply with EU rules on the matter. The Euro currency is pressured late this week on reports Italy will delay its fiscal and economic projections. This matter could be the next flash point in the currency and financial markets.

The key outside markets today find the U.S. dollar index higher on a big rebound from recent selling pressure. Greenback bulls are now right back in business. Meantime, November Nymex crude oil prices are slightly higher and trading just above $72.00 a barrel.

U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-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 overnight high of 2,924.25 and then at this week’s high of 2,936.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,907.50 and then at 2,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

December Nasdaq index December futures: Prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 7,686.25 and then at 7,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 7,586.00 and then at 7,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer on more short covering after hitting a four-month low Tuesday. Bears still have the overall near-term technical advantage as a four-week-old downtrend is in place on the daily chart. 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 141 16/32 and then at 141 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 19/32 and then at 140 8/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are higher on more short covering after hitting a four-month low on Tuesday. Bears still have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. 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 lies at this week’s high of 118.31.5 and then at 119.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.24.0 and then at 118.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher and hit a three-week high in early U.S. trading. A five-week-old downtrend on the daily bar chart has been soundly negated. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 95.000 and then at the September high of 95.280. Shorter-term support is seen at the overnight low of 94.550 and then at 94.000. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

November Nymex crude oil prices are near steady and not far below Tuesday’s contract high in early U.S. trading. The bulls have the solid overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the contract high of $72.78 and then at $73.00. Look for sell stops just below technical support at this week’s low of $71.14 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures prices were steady to narrowly mixed overnight. Grain market bears still have the overall near-term technical advantage, but corn and soybean prices look like they have bottomed out. U.S. corn and soybean harvest pressure is under way at full speed, so look for farmer selling pressure to limit the upside. Traders are awaiting this morning’s USDA quarterly grain stocks projections.

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