Tuesday, November 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight, whiled U.S. stock indexes are also mixed to firmer ahead of the New York day session. The marketplace euphoria is not quite as strong Tuesday, following Monday’s news that a successful vaccine has been found for Covid-19. While that news is certainly a bright light in a dark period for the world, the markets on Tuesday are realizing there is still a very rough patch that lies ahead in dealing with the pandemic, both for major economies and human health.
The gold market has rebounded a bit from Monday’s strong losses that were the worst in seven years and pushed prices to nine-week lows. Gold market bulls on Tuesday are focusing more on the economic impact of record-setting monetary stimulus measures that have been enacted by central banks over the past six months, and probably more stimulus in the coming months. This scenario seems to be inviting some serious price inflation down the road—especially as recovering major world economies shift into higher gears in the coming months.
U.S. Treasury bond and note yields have risen to eight-month highs this week, on the prospects for a solid U.S. economic recovery in 2021. The yield on the benchmark 10-year U.S. Treasury note is currently fetching 0.94%.
The U.S. dollar index is higher early today on a corrective bounce after hitting a nine-week low Monday. The other important outside market sees crude oil prices higher and trading around $40.50 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, and the IBD/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady after hitting a new contract and record high on Monday. Bulls have the overall near-term technical advantage, but Monday’s low-range close after spiking higher created a bearish buying “exhaustion tail” on the daily bar chart.
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 even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 3,562.75 and then at 3,600.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,511.25 and then at 3,500.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are solidly lower in early U.S. trading after hitting a nine-week high Monday. Bulls have the overall near-term technical advantage, but Monday’s low-range close after spiking higher created a bearish buying “exhaustion tail” on the daily bar chart. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at overnight high of 11,901.50 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,553.00 and then at 11,400.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting a multi-month low Monday. Bears have the near-term technical advantage. 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) bearish early today. Shorter-term technical resistance is seen at the overnight high of 171 14/32 and then at 172 even. Shorter-term support lies at this week’s low of 169 29/32 and then at 169 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up in early U.S. trading. Bears have near-term technical control. 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 bearish early today. Shorter-term resistance lies at the overnight high of 137.29.5 and then at 138.00.0. Shorter-term technical support lies at the overnight low of 137.17.0 and then at this week’s low of 137.13.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-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 1.1853 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1788 and then at 1.1750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are higher in early U.S. trading. Bulls have near-term technical control. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $41.33 and then at $42.00. Look for sell stops just below technical support at $40.00 and then at the overnight low of $39.41. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are higher in early U.S. pre-market trading, as the Covid-19 vaccine news has boosted demand hopes for the grains. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place in all three markets. On tap today is the monthly USDA supply and demand report, which is expected to favor the bulls, overall.
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