Wednesday, November 13–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly down overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
Risk aversion is keener at mid-week following remarks made by President Trump in a speech in New York Tuesday. The mercurial Trump appeared to suggest the U.S. is not so keen on removing its tariffs on Chinese imports. While he said trade talks are going well and a “Phase 1” deal could be reached soon, reports have said the Chinese are adamant that the U.S. tariffs must be removed to get a Phase 1 trade deal signed. It should be not at all surprising that the marketplace’s perception of progress on the trade talks between the world’s two largest economies has down-ticked in recent days. The trade talks’ progress or lack thereof has been a rollercoaster affair for the markets for many months.
Gold prices are getting a good safe-haven bid on Trump’s comments Tuesday. Trump also bashed the Federal Reserve again in his remarks to economists in New York. Fed Chairman Jerome Powell testifies on the U.S. economy in front of Congress today and will surely be asked what he thinks about Trump’s latest bashing of the Fed. Trump’s browbeating of the Fed may or may not be a market factor or an influence on the Fed’s policy actions. However, many feel Powell has and will continue to lean easy on U.S. monetary policy due in part to Trump’s berating of him and the Fed for not lowering interest rates more.
Gold and other safe-haven assets are also benefitting from an escalation in protesting and violence this week in Hong Kong. The civil unrest is spreading in the city and appears likely to get worse before it gets better.
The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $56.35 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the consumer price index, real earnings and the monthly Treasury budget statement. Besides Powell’s speech to Congress today, several other Fed officials are slated to give speeches.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly lower in early U.S. trading, on normal profit taking from recent good gains. Bulls still have the solid overall near-term technical advantage. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,091.75 and then at the contract high of 3,102.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 3,063.00 and then at 3,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are lower in early U.S. trading, on normal profit taking from recent gains. Bulls still have the solid 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. 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 8,273.75 and then at the contract high of 8,300.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 8,200.00 and then at last week’s low of 8,161.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering. Bulls are trying to stabilize the down-trending market. Bears still have the overall near-term technical advantage amid a five-week-old downtrend in place on the daily bar chart. 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 157 22/32 and then at 157 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at 157 even and then at 156 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Prices are still is a five-week-old downtrend on the daily bar chart. 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 bullish early today. Shorter-term support lies at 128.20.0 and then at the overnight low of 128.10.5. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 129.00.0 and then at 128.06.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly firmer and hit a four-week high in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day. The 9-day is above with 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 the overnight high of 98.300 and then at 98.500. Shorter-term support is seen at this week’s low of 97.970 and then at 97.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are weaker in early U.S. trading. Prices are still in a five-week-old uptrend on the daily bar chart. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 the overnight high of $56.80 and then at this week’s high of $57.55. Look for sell stops just below technical support at last week’s low of $55.76 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures prices were mixed overnight, with corn down around 1 cent, soybeans up 1 to 2 cents and wheat around 3 cents lower. Grain traders are a bit more downbeat at mid-week following remarks made by President Trump in a speech in New York Tuesday. The mercurial Trump appeared to suggest the U.S. is not so keen on removing its tariffs on Chinese imports. While he said trade talks are going well and a “Phase 1” deal could be reached soon, reports have said the Chinese are adamant that the U.S. tariffs must be removed to get a Phase 1 trade deal signed. It should be not at all surprising that the marketplace’s perception of progress on the trade talks between the world’s two largest economies has down-ticked in recent days. The trade talks’ progress or lack thereof has been a rollercoaster affair for the grain markets for many months. The USDA weekly crop progress report issued Tuesday afternoon showed US corn harvest at 66% complete versus 68% forecast by traders and 52% completed last week. US soybean harvest is at 85% complete versus 87% estimated and 75% completed last week. The US winter wheat rating is at 54% good to excellent versus 57% forecast and 57% in that condition last week. US winter wheat plantings are at 92% complete versus 93% forecast and 89% complete last week. Continuing to limit selling interest in grain futures this week is the Midwest US weather, which remains very cold and snowy. That is further delay harvesting of corn and soybeans still in the fields and could cause quality problems for those crops—if they can even get harvested this year.
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