Monday, October 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are set to open the New York day session higher. To start the trading week, traders and investors are focused on the aspect of President Trump’s condition improving following him testing positive for Covid-19 last week and entering the hospital Friday. Reports said Trump could be released from Walter Reed hospital today. Also, some are arguing that former vice president Joe Biden’s widening lead in the presidential polls that could provide a more decisive outcome of the election is a positive for trader and investor sentiment. However, others would argue a Biden presidential victory would not be good for the stock market, given his pledge to raise taxes and roll back some of Trump’s decrees to free up restrictions on U.S. business and industry. Still, most agree Trump’s Covid condition is still very fluid and could change quickly.
Meantime, in other overnight news, the Eurozone reported upbeat retail sales data for August—up 4.4% from July and up 3.7% year-on-year. The Eurozone September composite purchasing managers index (PMI) was also a bit better than expected at 50.4 versus expectations for a reading of 50.1. A reading above 50.0 suggests growth in the sector.
The important outside markets early today see the U.S. dollar index weaker. Nymex crude oil prices are solidly higher and trading around $38.50 a barrel. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.71% today.
U.S. economic data due for release Monday includes the U.S. services purchasing managers index (PMI) the employment trends index, the ISM report on business services, and the global services PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the firm 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 below 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 last week’s high of 3,388.00 and then at 3,420.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at last week’s low of 3,287.50 and then at 3,250.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are higher 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 and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 11,400.00 and then at 11,500.00. On the downside, shorter-term support is seen at the overnight low of 11,267.50 and then at last week’s low of 11,140.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower and hit a three-week low in early U.S. trading. Bulls have faded. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 175 25/32n and then at 176 even. Shorter-term support lies at the overnight low of 175 1/32 and then at 174 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 139.14.5 and then at 139.20.0. Shorter-term technical support lies at the overnight low of 139.09.0 and then at last week’s low of 139.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are higher in early U.S. trading. Bulls have gained some momentum. 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 last week’s high of 1.1787 and then at 1.1800. Shorter-term support is seen at the overnight low of 1.1725 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are solidly higher in early U.S. trading, on short covering from last week’s losses. The shorter-term moving averages are neutral early today as the 4-day is below 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 to bullish early today. Look for buy stops to reside just above technical resistance at $39.00 and then at $40.00. Look for sell stops just below technical support at $38.00 and then at the overnight low of $37.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Grain traders this week will look to the outside markets for direction, given Trump being in the hospital for Covid. Focus is also on U.S. harvest results, which are coming in varied. On tap today is the weekly USDA export inspections report.
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