Friday, October 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. The stock index bulls have gained strength late this week, amid corporate earnings reports that have been generally upbeat.
The key U.S. data point Friday is the monthly retail sales report for September, which is forecast down 0.2% from August after a gain of 0.7% in August from July.
Traders and investors have been watching developments on raw commodity/supply chain front. Winter is approaching in the Northern Hemisphere and some countries are worried about securing adequate energy supplies. The U.S. government has implemented 24-hour-a-day work shifts at major West Coast U.S. ports. And raw material prices are rising rapidly, with copper prices on the London Metal Exchange rising over 7% just this week. All of the above are likely to add to inflationary price pressures that could become problematic down the road.
The U.S. Securities and Exchange Commission appears ready to allow the first U.S. Bitcoin futures exchange-traded fund to begin trading. That helped push Bitcoin to within striking distance of $60,000 Friday.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil futures are higher, hit a seven-year high and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching around 1.547%.
U.S. economic data due for release Friday includes the Empire State manufacturing survey, retail sales, import and export prices, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly up and hit a two-week high in early U.S. trading. A five-week-old downtrend on the daily bar chart has been negated late this week and the bulls have regained the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,450.00 and then at 4,472.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,426.25 and then at 4,400.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer and hit a two-week high in early U.S. trading. A five-week-old downtrend on the daily bar chart has been negated. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 15,112.75 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,000.00 and then at 14,850.00. 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 weaker in early U.S. trading. 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 technical resistance is seen at this week’s high of 160 11/32 and then at 160 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 159 6/32 and then at 158 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance is seen at this week’s high of 131.19.5 and then at 131.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 131.06.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly higher in early U.S. trading. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1637 and then at the October high of 1.1656. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1600 and then at this week’s low of 1.1537. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a seven-year high 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $82.30 and then at $83.00. Look for sell stops just below technical support at Thursday’s low of $80.38 and then at this week’s low of $79.42. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were higher overnight. Weekly USDA export sales are out today. Corn and soybean bears have the firm near-term technical advantage. Wheat bulls remain in technical command. Harvesting of the U.S. corn and soybean crops has progressed rapidly and that’s bearish and will also keep pressure on corn and soybeans. It’s likely that the bearish corn and soybean markets will limit the upside in wheat for the near term.
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