Thursday, October 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in quieter overnight trading. U.S. stock indexes are pointed toward near steady openings when the New York day session begins.
Gold prices are firmer in pre-U.S.-session trading, on more short covering and perceived bargain hunting following recent selling pressure.
Traders and investors are looking ahead to Friday’s U.S. employment report for September from the Labor Department. The key non-farm payrolls number is expected to come in at up only 80,000, according to a Dow Jones Newswires survey. The unusually low non-farm jobs growth estimate is due to two major hurricanes that hit the U.S. mainland in September.
The U.S. dollar index is slightly higher in early U.S. trading. The greenback bulls have been working the dollar index sideways to higher for the past few weeks. Meantime, the Euro currency has been suffering during that same time.
The other key outside market on Thursday morning sees Nymex crude oil futures also slightly higher. Oil gains have been capped this week by notions of rising U.S. crude oil production that is approaching 10 million barrels a day.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, manufacturers’ shipments and inventories, and monthly chain store sales reports.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading, after hitting a contract and record high on Wednesday. The market is now overbought and due for a downside correction very soon. 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,538.00 and then at 2,550.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,525.00 and then at this week’s low of 2,517.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index December futures: Prices are slightly up in early U.S. trading today. Prices are near the contract and record high. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 6,015.50 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 Wednesday’s low of 5,979.00 and then at this week’s low of 5,958.50. 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 higher on more short covering after hitting a two-month low on Tuesday. Prices are still in a four-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are 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 technical resistance is seen at this week’s high of 153 8/32 and then at 153 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 15/32 and then at this week’s low of 152 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 more short covering after prices Monday hit a 2.5-month low. Bears still have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. 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 bullish early today. Shorter-term resistance lies at this week’s high of 125.19.5 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.09.0 and then at 125.05.0. 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 higher in early U.S. trading. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 93.420 and then at this week’s high of 93.775. Shorter-term support is seen at this week’s low of 92.940 and then at 92.800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly higher in early U.S. trading. Bulls still have the slight overall near-term technical advantage. However, there are stiff chart resistance layers that lie just overhead, to suggest that a market top is in place. Look for buy stops to reside just above technical resistance at $51.00 and then at this week’s high of $51.71. Look for sell stops just below technical support at this week’s low of $49.76 and then at $49.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were mixed overnight. On tap today is the weekly USDA export sales report. The sideways and choppy price action in the grain markets the past couple weeks could be basing, which makes me suspect that harvest lows are in place and that prices will at least work sideways into the end of the year. I don’t look for any significant rallies right during the U.S. corn and soybean harvesting.