Friday, October 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. Some Asian markets were closed for a holiday. U.S. stock indexes are set to open the New York day session solidly lower. News that President Trump and his wife have tested positive for Covid-19 has rattled the marketplace. Trump’s re-election campaign has been thrown into turmoil when he was already well behind in the polls. The bottom line on this matter: even more marketplace uncertainty in an already very uncertain U.S. presidential election atmosphere. Trump’s positive Covid test puts the spotlight back on a resurgence of infections in many major countries that could turn into a “second wave” that again damages economies that have just begun to recover from the first lockdown.
Traders and investors are also awaiting the U.S. economic data point of the week, which is Friday morning’s monthly jobless report for September from the Labor Department. The key non-farm payrolls number is forecast at up 875,000 and the unemployment rate is forecast at 8.2%. Trump’s Covid-19 news will likely overshadow the impact of the jobs report—unless it is a major miss from forecasts.
In other overnight news, the Euro zone September CPI came in at -0.3% versus -0.2% in August. Year-on-year, the Euro zone CPI was up 0.2% in September. Once again, the data coming from most major world economies is not pointing to a resurgence of inflation anytime soon.
The important outside markets early today see the U.S. dollar index slightly up. Nymex crude oil prices are solidly lower, hit a three-week low and are trading around $37.00 a barrel. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.66% today.
Other U.S. economic data due for release Friday includes the ISN New York report on business, manufacturers’ shipments and inventories, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 3,388.00 and then at 3,420.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,287.50 and then at 3,250.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 11,500.00 and then at the overnight high of 11,604.75. On the downside, shorter-term support is seen at the overnight low of 11,290.50 and then at this week’s low of 11,140.25. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have faded this week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 177 even and then at this week’s high of 177 12/32. Shorter-term support lies at the overnight low of 176 6/32 and then at 175 28/32. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the overall near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 139.24.0 and then at 139.29.0. Shorter-term technical support lies at the overnight low of 139.16.0 and then at 139.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Prices are still trending lower on the daily chart. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below 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 1.1765 and then at 1.1800. Shorter-term support is seen at 1.1700 and then at 1.1650. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are solidly lower and hit a three-week low in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $38.00 and then at $39.00. Look for sell stops just below technical support at the September low of $36.58 and then at $36.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
US grain futures are lower in early U.S. pre-market trading, on risk aversion after Trump tested positive for Covid-19. Also, markets are due for a correction and consolidation following this week’s solid gains. Focus is on U.S. harvest results, which are coming in better than expected so far.
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