Thursday, November 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, while U.S. stock indexes are also mixed ahead of the New York day session. The U.S. has seen over 240,000 deaths and more than 10.3 million confirmed Covid-19 infections, with new cases soaring to all-time highs of well over 120,000 per day over the past week. The marketplace is paying more attention to the grim news as the likelihood of increasing business and public-gathering restrictions in the weeks and months ahead is rapidly growing. While news earlier this week of successful Covid vaccines coming on line in the coming months boosted trader and investor confidence, that initial euphoria has waned as the week has progressed.
The marketplace is also becoming increasingly concerned, although not seriously alarmed yet, about a smooth transition of power for the U.S. presidency. Outgoing President Trump is not conceding the election he lost and appears to be hampering President-elect Biden’s transition to power. Trump this week fired the U.S. military’s leader, defense secretary Mark Esper.
In overnight news, the Eurozone got some downbeat economic news, as its industrial output for September fell by 0.4% from August and was down 6.8%, year-on-year. Those numbers were weaker than expected.
U.S. Treasury bond and note yields have risen to eight-month highs this week, on the prospects for a solid U.S. economic recovery in the second half of 2021. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.94%.
The U.S. dollar index is weaker early today. The other important outside market sees crude oil prices slightly higher and trading around $41.50 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the consumer price index, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage, but Monday’s low-range close after spiking higher has created a bearish buying “exhaustion tail” on the daily bar chart, suggesting a near-term top is in place. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 3,576.75 and then at 3,600.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,538.25 and then at this week’s low of 3,506.50. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are modestly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage, but Monday’s low-range close after spiking higher created a bearish buying “exhaustion tail” on the daily bar chart. There is also the specter of a bearish double-top reversal on the daily chart. 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 12,000.00 and then at 12,119.50. On the downside, shorter-term support is seen at the overnight low of 11,781.25 and then at 11,650.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting a contract low Wednesday. Bears have the solid near-term technical advantage. 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 the overnight high of 171 7/32 and then at 172 even. Shorter-term support lies at the overnight low of 170 15/32 and then at 170 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer on short covering after hitting a five-month low on Wednesday. Bears have the firm near-term technical advantage. 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 resistance lies at the overnight high of 137.27.5 and then at 138.00.0. Shorter-term technical support lies at the overnight low of 137.19.5 and then at 137.13.0. 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. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.1853 and then at 1.1894. Shorter-term support is seen at this week’s low of 1.1753 and then at 1.1720. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady in early U.S. trading. Bulls have the firm 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $41.94 and then at this week’s high of $43.06. Look for sell stops just below technical support at the overnight low of $41.00 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are mixed to weaker in early U.S. pre-market trading, on profit taking from recent strong gains. Corn and soybean futures this week hit new contract highs following a bullish USDA report this week and continued strong export demand for U.S. grains. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place in all three markets. There are no early clues to suggest the grain markets are close to topping out.
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