Monday, September 25–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in overnight trading. The German elections held over the weekend saw Chancellor Angela Merkel secure a fourth term. However, voters did make a shift to the right, which could make it more difficult for Merkel to form a coalition. The elections had little impact on world markets. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
Gold prices are trading near unchanged. Silver prices are also trading near steady. The firmer U.S. dollar index Monday is a daily bearish element working against the precious metals markets.
Focus this week is on central bankers speeches. European Central Bank President Mario Draghi speaks Monday and Federal Reserve Chair Janet Yellen delivers a speech Tuesday. Other Federal Reserve officials will also give speeches throughout the week.
There were more verbal barbs traded between President Donald Trump and North Korea’s Kim Jong Un over the weekend. However, the marketplace on Monday morning does not perceive the U.S.-North Korea conflict has having escalated from last week. However, look for this matter to intensify in the near term.
In overnight news, the closely watched German Ifo business climate index fell to 115.2 in September from 115.9 in August.
The key outside markets on Monday morning see the U.S. dollar index higher. Greenback bears still have the firm overall near-term technical advantage. Meantime, Nymex crude oil futures are near steady this morning. The oil bulls have the slight near-term technical advantage as prices hover above $50 a barrel.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on profit taking after prices last week hit contract and record highs. The shorter-term moving averages (4-, 9- and 18-day) are still 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 bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,507.25 and then at 2,515.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,492.00 and then at 2,487.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index December futures: Prices are slightly lower in early U.S. trading today. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 5,954.25 and then at 5,980.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last week’s low of 5,911.00 and then at 5,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher in early U.S. trading, on more short covering. Shorter-term moving averages (4- 9- 18-day) are still 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 the overnight high of 154 24/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 4/32 and then at last week’s low of 153 16/32. 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, on short covering. Shorter-term moving averages (4- 9- 18-day) are still 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 resistance lies at 126.00.0 and then at 126.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.23.0 and then at last week’s low of 125.17.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 92.495 and then at 93.000. Shorter-term support is seen at the overnight low of 92.000 and then at Friday’s low of 91.575. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage. Prices last week hit a four-month high. Look for buy stops to reside just above technical resistance at last week’s high of $50.79 and then at $51.00. Look for sell stops just below technical support at $50.00 and then at last week’s low of $49.68. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were weaker overnight. U.S. harvest is picking up speed rapidly and will in full swing by the end of this week. Harvest hedge pressure will make it tough for corn and soybeans to make significant upside headway in the coming weeks.