Tuesday, November 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are headed for slightly higher openings when the New York day session begins. The U.S. mid-term elections on Tuesday are a focus for the marketplace this week. Pollsters are predicting the Democrats will lose the House and may lose the Senate. Interestingly, gold prices have risen 62% of the time over the six months following midterm U.S. elections, with a median return of 2%, according to a World Gold Council report using data going back to 1970.
Traders and investors are increasingly concerned about rising Covid cases in China, the world’s second-largest economy. Reports said the number of new cases climbed above 7,500 Monday–the highest since May. Guangzhou, capital of Guangdong province and the nation’s manufacturing hub, accounted for a third of the total cases. Broker SP Angel reports China is probably two years behind the West in its war with Covid infections. “While Chinese manufacturers gained market share in global markets when the West locked down, the nation now risks losing many overseas companies as the risk of ongoing lockdowns. Locking in workers risks their human rights.”
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $90.50 a barrel. The 10-year U.S. Treasury note is yielding 4.201%.
The U.S. gets its next report card on the inflation fight Thursday, with the release of the consumer price index report for October, which is seen coming in up 7.9%, year-on-year, compared to the 8.2% rise seen in the September report.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail and chain store sales indexes, the NFIB small business index, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bears have 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 below the 9-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 3,850.00 and then at 3,900.00. Support for active traders is seen at this week’s low of 3,738.25 and then at last week’s low of 3,704.25. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 11,200.00 and then at 11,400.00. On the downside, shorter-term support is seen at the overnight low of 10,954.75 and then at this week’s low of 10,751.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid overall 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 neutral early today. Shorter-term technical resistance is seen at 119 even and then at this week’s high of 120 even. Shorter-term support lies at 118 even and then at the contract low of 117 19/32. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are firmer in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid overall technical advantage. 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s high of 110.06.0 and then at 110.16.0. Shorter-term technical support lies at last week’s low of 109.10.5 and then at 109.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0064 and then at 1.0100. Shorter-term support is seen at this week’s low of .9948 and then at .9900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower in early U.S. trading. Prices hit a nine-week high Monday. The shorter-term moving averages are bullish early today as the 4-day is above 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 bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $93.74 and then at $95.00. Look for sell stops just below technical support at $90.00 and then at last Friday’s low of $87.82. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were slightly weaker in overnight trading. Corn bulls have the slight overall near-term technical advantage. Soybeans bulls also have the slight chart edge. Wheat bears have the near-term technical advantage. Seasonality studies are starting to favor the grain market bulls as the U.S. corn and soybean harvests wind down. Traders are looking ahead to Wednesday’s monthly USDA supply and demand 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