Wednesday, September 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading, with Asian shares mostly weaker and European shares mostly up. The U.S. stock indexes are pointed to higher openings when the New York day session begins, after seeing sharp losses Tuesday. The marketplace appears a bit calmer at mid-week, following early-week risk aversion that was prompted by rising government bond yields and worries about energy shortages in major economies. It also appears financial markets had a bit of a delayed reaction to last week’s FOMC meeting that saw the Federal Reserve lay the groundwork for tapering its monthly bond-buying program that has been in place for quite some time.
President Biden’s infrastructure package is set for a House of Representatives vote on Thursday. Meantime, the U.S. government’s funding will run out at midnight Thursday, which if not extended, would shut down part of the government Friday.
The key outside markets today see the U.S. dollar index slightly higher and hitting an 11-month high overnight. Nymex crude oil futures are weaker and trading around $74.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.501%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, pending home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading, on a corrective bounce after sharp losses suffered Tuesday. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,415.00 and then at Tuesday’s high of 4,442.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,334.75 and then at 4,315.00. 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, on a rebound from sharp losses seen Tuesday. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 15,000.00 and then at Tuesday’s high of 15,192.25. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 14,740.75 and then at the August low of 14,699.00. 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 higher after hitting a 2.5.-month low in overnight trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 Tuesday’s high of 160 26/32 and then at this week’s high of 161 8/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 158 22/32 and then at 158 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher 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 132.00.0 and then at this week’s high of 132.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.16.0 and then at this week’s low of 131.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are lower and hit a 14-month low in early U.S. trading. 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1707 and then at this week’s high of 1.1743. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1671 and then at 1.1650. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading. Bulls are in solid technical control. 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 bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $76.67 and then at $77.00. Look for sell stops just below technical support at the overnight low of $73.74 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were higher overnight. Risk aversion in the market place has receded a bit at mid-week and that’s supportive for the grains. The data points of the week for the grain markets are the quarterly USDA grain stocks and weekly exports sales reports on Thursday. The corn and soybean market bears still have the near-term technical advantage, while the wheat bulls have the slight near-term technical advantage.
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