Thursday, September 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. The U.S. stock indexes are also pointed to higher openings when the New York day session begins. Risk appetite is increasing late this week, following Monday’s sharp sell off in U.S. and global stock markets. The marketplace at present feels the troubled Chinese property giant, Evergrande, will not create a contagion effect in financial markets. Most believe the Chinese government will not let Evergrande fail. The firm had an $83 million interest payment due Thursday and it is not known if the payment was made.
The conclusion of the Federal Reserve’s FOMC meeting Wednesday afternoon saw the U.S. central bank make no monetary policy changes, but it did set the table for future tapering of its bond-buying program, and an increase in its key interest rate in 2022. Fed Chairman Powell at his press conference sounded upbeat on U.S. economic and jobs-growth prospects. Judging by the positive reactions of stock and financial markets, the Fed meeting’s results, while not leaning dovish, were not too hawkish on U.S. monetary policy.
The Bank of England held its regular monetary policy meeting Thursday and as expected made no major changes, leaving its key interest rate at 0.1%.
The U.S. government is grappling with extending the U.S. debt ceiling. Treasury Secretary Janet Yellen said the government will run out of money sometime in October. While looming over the marketplace, this situation has played out more than once over recent years, but it could still inject some anxiety into the marketplace, if the government actually nears a shutdown.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are a bit weaker and trading around $72.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.335%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the U.S. flash services and manufacturing PMIs, the Kansas City Fed manufacturing survey, and leading economic indicators.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. A near-term price uptrend on the daily bar chart was negated earlier this week to still suggest a near-term market top is in place. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,424.75 and then at 4,450.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,385.75 and then at 4,350.00. 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. Bulls have the overall chart advantage. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 15,338.25 and then at 15,400.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 15,176.00 and then at 15,000.00. 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 in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 164 16/32 and then at 164 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at Wednesday’s low of 163 12/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are near steady 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 bearish early today. Shorter-term resistance lies at the overnight high of 133.06.0 and then at this week’s high of 133.12.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 132.24.0 and then at last week’s low of 132.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are firmer 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1775 and then at 1.1800. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1701 and then at the August low of 1.1690. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are modestly down in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-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 the September high of $72.87 and then at the July high of $73.58. Look for sell stops just below technical support at $70.64 and then at this week’s low of $69.39. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were mixed to higher overnight. Better risk sentiment late this week is supporting the grains. On tap today is the weekly USDA export sales report. The corn and soybean market bears still have the near-term technical advantage, while the wheat bulls and bears are on a neutral playing field 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