Friday, October 27–Jim Wyckoff’s morning markets report
The marketplace is not reacting strongly to news overnight that the U.S. military struck Iranian-backed militants and their installations in Syria. The U.S. said the strikes were in response to those militants firing missiles and flying drones to attack U.S. interests in the Gulf region.
A Wall Street Journal headline today reads: “(U.S.) inflation trends likely to keep Fed rate-hike pause on track.” The marketplace consensus is that the Federal Reserve will hold its monetary policy steady at next week’s FOMC meeting.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are solidly up and trading around $85.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.858%.
U.S. economic data due for release Friday includes personal income and outlays, including the PCE inflation components. The University of Michigan consumer sentiment survey is also due out.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer on short covering after hitting a nearly six-month low Thursday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s high of 4,205.00 and then at 4,250.00. Support for active traders is seen at this week’s low of 4,146.25 and then at 4,125.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are higher on short covering after hitting a five-month low on Thursday. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Thursday’s high of 14,459.00 and then at 14,600.00. On the downside, shorter-term support is seen at this week’s low of 14,140.25 and then at 14,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 110 16/32 and then at 111 even. Shorter-term support lies at Thursday’s low of 107 28/32 and then at the contract low of 107 4/32. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 106.22.0 and then at 107.00.0. Shorter-term technical support is seen at 106.00.0 and then at the contract low of 105.10.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are near steady in early U.S. trading. Bears have the firm overall near-term technical advantage. 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 1.0668 and then at this week’s high of 1.0721. Shorter-term support is seen at this week’s low of 1.0542 and then at 1.0523. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are higher 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 neutral early today. Look for buy stops to reside just above technical resistance at $87.00 and then at this week’s high of $88.29. Look for sell stops just below technical support at the overnight low of $83.40 and then at this week’s low of $82.08. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed to firmer in overnight trading. Technicals are overall bearish for corn and wheat and the bears have gained fresh downside momentum this week. Technicals are neutral for soybeans. The still red-hot bullish meal market suggests soybeans will also see some upside price action in the near term.
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