Wednesday, November 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly up overnight, while U.S. stock indexes are higher ahead of the New York day session. Monday’s news that Pfizer has produced a successful vaccine for Covid-19 has been followed by other firms saying they are also close to doing so. Russia has now also come out and claimed it has a vaccine that is 92% effective. The marketplace at mid-week is dealing with notions that as soon as the latter half of 2021, economies and humans’ way of life could be almost back to normal. But in the meantime, the coronavirus is rampant in the U.S., Europe and elsewhere. Many states in the U.S. are reporting hospitals are full—and it’s not even winter yet, when conditions are expected to be worse. The spike highs in the U.S. stock indexes Monday, on the initial euphoria surrounding a successful vaccine, could well be market tops that won’t get taken out any time soon.
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 2021. The yield on the benchmark 10-year U.S. Treasury note futures is currently fetching 0.96%. The U.S. government and U.S. Treasury market are closed Wednesday for the Veterans Day holiday.
The U.S. dollar index is higher early today on a corrective bounce after hitting a nine-week low Monday. The other important outside market sees crude oil prices higher, hitting a nine-week high, and trading around $42.75 a barrel.
U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey. The U.S. government is closed today for Veterans Day.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are 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, 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 bullish early today. Today, shorter-term technical resistance comes in at 3,600.00 and then at 3,625.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,531.00 and then at Tuesday’s low of 3,506.50. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are 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 Tuesday’s high of 11,901.50 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,575.25 and then at Tuesday’s low of 11,503.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading and hit a contract low overnight. 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) bearish early today. Shorter-term technical resistance is seen at the overnight high of 170 13/32 and then at 171 even. Shorter-term support lies at today’s contract low of 169 16/32 and then at 169 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker and hit a five-month low in early U.S. trading. 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 bearish early today. Shorter-term resistance lies at the overnight high of 137.17.5 and then at 137.24.0. Shorter-term technical support lies at the overnight low of 137.08.0 and then at 137.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are lower 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1841 and then at 1.1894. Shorter-term support is seen at the overnight low of 1.1770 and then at 1.1750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are higher and hit a nine-week high in early U.S. trading. Bulls have firm near-term technical control. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $43.06 and then at $44.00. Look for sell stops just below technical support at $42.00 and then at the overnight low of $41.45. Wyckoff’s Intra-Day Market Rating: 6.6
GRAINS
US grain futures are higher in early U.S. pre-market trading, on follow-through strength from good gains posted Tuesday following a bullish USDA supply and demand report. Corn and soybean futures hit new for-the-move highs. The Covid-19 vaccine news has boosted demand hopes for the 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