Wednesday, November 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight, while U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The marketplace is presently grappling with the specter of a Covid-19 vaccine coming to the public in the coming months that will likely give economies a strong boost, while at the same time realizing it’s going to be a grim winter as the pandemic continues to rage in many areas around the globe, including the U.S. and parts of Europe.
Also weighing on trader/investor sentiment is the likelihood that no new U.S. government stimulus package is on horizon despite millions of Americans struggling after Covid wiped out their jobs.
In overnight news, the Euro zone October consumer price index rose 0.2% from September and was down 0.3%, year-on-year. Those numbers were in line with market expectations and still don’t show any signs of problematic inflation any time soon. Once the pandemic is under control and economies start to recover rapidly, that’s likely when producer and consumer prices could start to rise at a faster clip.
The U.S. dollar index is lower again early today and the greenback bears are having a good week. The other important outside market sees crude oil prices firmer and trading around $41.80 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.86%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage and prices are not far below the recent spike high. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 3,637.00 and then at the November high of 3,668.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,585.75 and then at 3,550.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid 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. 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 12,096.25 and then at the October high of 12,249.00. On the downside, shorter-term support is seen at this week’s low of 11,851.75 and then at 11,775.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Bears still have the solid near-term technical advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 173 15/32 and then at 174 even. Shorter-term support lies at 172 even and then at this week’s low of 171 9/32. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading. Bears have the firm near-term technical advantage. 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 neutral early today. Shorter-term resistance lies at the overnight high of 138.16.5 and then at 138.24.0. Shorter-term technical support lies at 138.00 and then at this week’s low of 137.27.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above 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 this week’s high of 1.1925 and then at the November high of 1.1954. Shorter-term support is seen at this week’s low of 1.1849 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer in early U.S. trading. Bulls have the 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $42.09 and then at the November high of $43.06. Look for sell stops just below technical support at the overnight low of $41.08 and then at this week’s low of $40.15. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are narrowly mixed in early U.S. pre-market trading. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place in all three markets. While there are no overwhelming technical clues that market tops are close at hand in the grains, there are a few technical signals that are suggesting market tops are probably close at hand. Watch for my bi-weekly newsletter that will be out later this week.
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