Monday, November 22–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. It may be a quieter trading week in the U.S. as the Thanksgiving holiday is on Thursday, with an abbreviated trading session Friday being historically one of the lowest-volume days of the year. European traders and investors remain worried about Covid lockdowns as infections in Europe and Asia are on the rise.
The markets event of the week could be President Biden’s pick for Federal Reserve Chair. Jerome Powell’s term expires in February. Reports say Powell and Fed governor Lael Brainard are Biden’s top candidates. Biden may announce his pick Tuesday at a speech on the U.S. economy.
The key outside markets today see the U.S. dollar index slightly higher and not far below last week’s 15-month high. Nymex crude oil prices are slightly up and trading around $76.00 a barrel. Oil prices hit a six-week low overnight and it appears a market top is in place. The 10-year U.S. Treasury note yield is presently fetching 1.56%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and existing home sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading and near Friday’s record high. 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. 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 and record high of 4,723.50 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 4,684.25 and then at 4,650.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading and hit a record high. 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 overnight contract high of 16,649.50 and then at 16,750.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Friday’s low of 16,490.25 and then at 16,400.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: 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 and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 161 27/32 and then at last week’s high of 162 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at 160 16/32 and then at 160 even. 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance is seen at the overnight high of 130.24.0 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.08.0 and then at the November low of 130.01.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading and near last week’s 16-month low. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1350 and then at 1.1379. Buy stops likely reside just above those levels. Shorter-term support is seen at the November low of 1.1254 and then at 1.1200. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading and hit a six-week low overnight. Bulls have faded badly recently to suggest a market top is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below 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 at $77.00 and then at $78.00. Look for sell stops just below technical support at the overnight low of $74.76 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were higher overnight. Bulls have momentum to start the trading week. On tap today is the USDA weekly export inspections report. The soybean meal futures market is trending solidly higher, which signals a market bottom is in place for soybeans. Corn and wheat bulls have the near-term technical advantage amid price uptrends in place on the daily charts. Wheat is the grain market leader on the upside, at present.
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