Tuesday, September 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Traders and investors worldwide are a bit cautious ahead of the U.S. Federal Reserve’s monetary policy meeting.
Gold prices are slightly higher in pre-U.S. day session trading, on some tepid short covering following recent selling pressure that pushed prices to a three-week low on Monday.
The markets’ highlight of the week is the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. No interest rate changes are expected from the FOMC at this meeting. However, it is expected the Fed will announce it is drawing down its balance sheet of securities. Fed Chair Janet Yellen will hold a press conference after the FOMC meeting ends. Also, the Federal Reserve will release inflation projections that will be closely scrutinized.
President Trump speaks in front of the United Nations in New York Tuesday. It’s expected that Trump will talk about North Korea’s missile program.
In overnight news, the German ZEW economic expectations index came in at 87.9 in September from 86.7 in August.
The key outside markets on Tuesday morning see the U.S. dollar index weaker. The greenback bears remain in firm technical control. Meantime, Nymex crude oil futures are trading firmer this morning. The oil bulls have the slight near-term technical advantage.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, import and export prices, and new residential construction.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly higher and trading at another contract and record high in early U.S. trading. 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 with 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 2,515.00 and then at 2,525.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,497.75 and then at 2,487.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are slightly higher in early U.S. trading today. Prices are not far below this month’s record high. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 6,018.25 and then at the contract high of 6,025.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 5,967.25 and then at 5,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly higher in early U.S. trading, on short covering from recent strong selling pressure. Bulls still have the overall near-term technical advantage but have faded and need to show more power soon. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 154 23/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 154 4/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering. Bulls still have the overall near-term technical advantage, but have faded badly recently and need to show more power soon. 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 resistance lies at Monday’s high of 126.09.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 126.01.0 and then at 125.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower in early U.S. trading. Bears 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 early today. The dollar index finds shorter-term technical resistance at 92.000 and then at last week’s high of 92.420. Shorter-term support is seen at last week’s low of 91.360 and then at 91.000. 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 slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the August high of $50.51 and then at $52.00. Look for sell stops just below technical support at the overnight low of $49.78 and then at $49.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were mixed overnight. Early corn harvest reports are coming in a bit lower than expected. Grain market bulls have shown impressive resilience recently, to suggest harvest lows are in place and that prices can work at least sideways, if not sideways to higher, into the end of the year.