Friday, September 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to solidly lower openings and three-month lows when the New York day session begins. Risk aversion remains keen late this week after Russian President Putin earlier this week said he will mobilize more troops to fight his war with Ukraine, and also implied he could use his nuclear weapons if Russia’s integrity is threatened. U.S. and/or global recession worries have increased this week, following downbeat comments on U.S. economic prospects from Federal Reserve Chairman Jerome Powell on Wednesday and as major central banks this week tightened their monetary policies to tamp down surging inflation.
In overnight news, the Euro zone manufacturing and services purchasing managers indexes dropped in September and are suggesting both sectors are contracting.
The key outside markets today see Nymex crude oil prices lower and trading around $81.50 a barrel. The U.S. dollar index is higher and pushed to another 20-year high in early U.S. trading. A Barron’s headline this morning reads: “The dollar is crushing its rival currencies.” It’s important to point out that price trends in the currency markets tend to be stronger and longer-lasting than price trends in other markets. Thus, the surge in the greenback may continue to for quite some time. Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.771%and at an 11-year high. The 2-year Treasury note yield is 4.205%.
U.S. economic data due for release Friday includes the U.S. flash manufacturing and services purchasing managers indexes.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are solidly lower and hit a three-month low in early U.S. trading. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,783.25 and then at Thursday’s high of 3,833.00. Support for active traders is seen at 3,700.00 and then at the June low of 3,657.00. Wyckoff’s Intra-day Market Rating: 3.0
December Nasdaq index futures: Prices are lower and hit a three-month low 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. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,600.25 and then at Thursday’s high of 11,796.00. On the downside, shorter-term support is seen at the June low of 11,1350.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 3.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading and hit a contract low. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid advantage. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 128 23/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 3.5
December U.S. T-Notes: Prices are lower and hit a contract low in early U.S. trading. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 bearish early today. Shorter-term resistance lies at 112.16.0 and then at the overnight high of 112.30.5. Shorter-term technical support lies at 111.24.0 and then at 111.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
EURO CURRENCY
The December Euro currency futures are lower and hit another contract low in early U.S. trading. Bears have the strong 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 .9913 and then at Thursday’s high of .9969. Shorter-term support is seen at the overnight contract low of .9796 and then at .9750. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
November Nymex crude oil prices are solidly lower and hit a seven-month low in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $83.92 and then at $85.00. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were solidly lower overnight. Keener risk aversion in the marketplace late this week is squelching the grain market bulls. Corn and soybean market bulls still have the overall near-term technical advantage. Wheat bulls have the slight overall near-term technical edge and have restarted price uptrends on the daily charts. However, if the stock and financial markets continue in bearish turmoil in the coming weeks (remember, September and October can be a historically rocky period for stocks, bonds and currencies), such could signal tops are in place in the grain markets.
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