Friday, November 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European shares mostly firmer and Asian shares mostly weaker. U.S. stock indexes are headed for mixed openings when the New York day session begins. Many U.S. markets close early Friday, the day after the Thanksgiving holiday in which U.S. markets were closed. Today is typically one of the slowest U.S. trading days of the year.
Today is “Black Friday” in the U.S., where holiday shoppers go wild. Early results on U.S. consumer spending will be closely examined by market watchers, including the Federal Reserve.
The marketplace remains subdued late this week as Covid-19 cases in China are rising at a record pace as China’s government tries to deal with its slumping economy amid Covid-related lockdowns. China’s central bank lowered its reserve requirement ratio by 25 basis points Friday in a bid to support the world’s second-largest economy. “Combined with other measures to boost the property market and ease Covid curbs, the cut could be supportive over the medium term when growth remains highly uncertain,” said one analyst.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are higher and trading around $79.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.722%.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading and near the recent for-the-move high. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The 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 is above 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 the November high of 4,050.75 and then at 4,100.00. Support for active traders is seen at 4,000.00 and then at this week’s low of 3,937.50. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 12,000.00 and then at the November high of 12,118.75. On the downside, shorter-term support is seen at Wednesday’s low of 11,720.00 and then at this week’s low of 11,526.50. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices hit a seven-week high overnight. 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 the overnight high of 128 13/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly lower in early U.S. trading after hitting a seven-week high overnight. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 113.24.5 and then at 114.00.0. Shorter-term technical support lies at 112.20.0 and then at this week’s low of 112.11.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0531 and then at the November high of 1.0568. Shorter-term support is seen at 1.0400 and then at this week’s low of 1.0316. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are higher in early U.S. trading. Bears have the overall near-term technical advantage as a price downtrend is in place on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $81.00 and then at this week’s high of $82.36. Look for sell stops just below technical support $78.00 and then at the overnight low of $76.89. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed in overnight trading. On tap today is the weekly USDA export sales report. Grain markets close early today. Grain bulls are squelched due to ongoing demand worries amid the China Covid lockdowns. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the firm near-term technical advantage. Grain traders will continue to closely monitor the key outside markets: the U.S. dollar index and crude oil prices.
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