Thursday, September 19–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly up in trading overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The marketplace is presently not as anxious as earlier this week, in the wake of the weekend terrorist attack on Saudi oil installations.
Traders and investors are still digesting the Federal Reserve’s Open Market Committee (FOMC) meeting that ended Wednesday afternoon and raised U.S. interest rates (the “Fed funds” rate) by 0.25%, to 1.75% to 2%. The move was expected by the marketplace. However, the FOMC members were split on the move, voting 7 to 3 in favor of the cut. Seven of 17 FOMC members expect just one more interest rate cut this year. The marketplace deemed the FOMC statement as not so easy on U.S. monetary policy as many had expected, despite the rate cut. “A divided Fed” is the term many are now using to describe the U.S. central bank’s monetary posture.
Overnight the Bank of Japan and held its monetary policy steady, while the Swiss National Bank did the same. The Bank of England is also meeting and its results are due out this morning.
The Paris-based OECD think tank has forecast global economic growth in 2019 at 2.9%, which is the slowest pace in 10 years. The OECD cited the U.S.-China trade war and Brexit fears as culprits for the slowing world economic growth pace.
Nymex crude oil prices are higher and trading around $59.00 a barrel. Reports this week said the damaged Saudi oil installations would be back on line by the end of this month, which is much sooner than initially expected.
The other key outside market today sees the U.S. dollar index trading lower.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, and leading economic indicators.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,013.75 and then at last week’s high of 3,025.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,980.75 and then at 2,970.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the solid overall technical advantage. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 7,929.50 and then at the September high of 8,002.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,850.00 and then at this week’s low of 7,798.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Bulls are having a good week, so far. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 160 24/32 and then at 161 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 17/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still 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 support lies at the overnight low of 129.03.5 and then at 129.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 129.17.5 and then at 129.24.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is lower in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 98.290 and then at 98.500. Shorter-term support is seen at 97.75 and then at last week’s low of 97.560. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. But it still appears this week’s spike high is a peak, unless there is a military flare-up in the Middle East. Prices are in a five-week-old uptrend on the daily bar chart. 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $59.46 and then at $60.00. Look for sell stops just below technical support at $58.00 and then at this week’s low of $57.67. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were steady to slightly lower in overnight trading. Focus of US grain traders today will be on the weekly USDA export sales report, and if China made any additional purchases of soybeans. Recent price action and the technical charts do suggest “harvest lows” are in place for grain prices. US-China trade relations also appear to be improved recently. Still, demand for US grains will have to pick up from present levels in order for price uptrends to be sustained in the US corn, soybean and wheat futures markets. Weather in the US Corn Belt remains warm but too wet in some areas, which is being read as neutral for the grains. There are no worries regarding a killing frost for the region. Grain traders are looking forward to getting anecdotal reports from US farmers regarding corn and soybean yields, once their combines start rolling.
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