Tuesday, October 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins, with the S&P 500 stock index hitting another record high overnight. Corporate earnings reports are front and center for stock market traders, at present. Keep in mind that traders and investors are fickle. This week focus is on positive corporate earnings data that is pushing the stock indexes higher. Come next week, inflation concerns that include rapidly rising energy costs and global shipping constrictions may have the marketplace in a more somber mood.
The key outside markets today see the U.S. dollar index slightly down. Crude oil prices are near steady and trading around $83.65 a barrel. Don’t be surprised if continually rising energy prices heading into the Northern Hemisphere winter start to bite at trader and investor sentiment. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.64%. For perspective, the yield on the 10-year German bund is presently -0.107% and the U.K. 10-year gilt is at 1.147%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales reports, the monthly house price index, the S&P-Case-Shiller house indexes, the Richmond Fed business survey, the consumer confidence index, and new residential sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit another record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,580.75 and then at 4,600.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,522.50 and then at 4,500.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are up and hit a six-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 15,612.25 and then at the contract high of 15,702.25. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 15,295.75 and then at 15,150.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading. 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 technical resistance is seen at 159 even and then at 159 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 158 9/32 and then at this week’s low of 157 24/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up in early U.S. trading. 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 is seen at the overnight high of 130.22.5 and then at 130.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 130.08.0 and then at last week’s low of 129.31.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the October high of 1.1681 and then at 1.1700. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1600 and then at last week’s low of 1.1584. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the solid near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance in at $85.00 and then at this week’s high of $85.41. Look for sell stops just below technical support at the overnight low of $82.97 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were weaker overnight. Corn and soybean bulls have gained some momentum recently, while wheat bulls have the firm overall near-term technical advantage. Commercial hedge pressure in soybeans and corn has peaked and is on the decline. Focus will turn to the demand side of the ledger as the U.S. harvest starts to wind down.
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