Monday, November 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight, while U.S. stock indexes are pointed toward mixed to higher openings when the New York day session begins. The global markets are still pricing in the news of a Covid-19 vaccine that will likely come on line for the general public in the coming few months, and then followed by a likely very rapid increase in economic growth in major countries hit hard by the pandemic. News just out that Moderna saw very promising results in its third stage of a vaccine trial further boosted the stock markets. Moderna’s vaccine is deemed at 94% effective and it only requires refrigeration of the vaccine, and not the extreme cold needed to keep Pfizer’s vaccine. The U.S. presently has 11 million Covid cases and many hospitals are full or nearly full.
Gold prices sold off sharply on the Moderna news this morning, while U.S. Treasury yields rose.
U.S. markets were also assuaged by weekend reports the incoming Biden administration is not planning to impose a national lockdown on the U.S. economy.
Asian shares were boosted in part on a trade deal signed by China, Japan, South Korea and 12 other countries, who produce one-third of global GDP.
In other overnight news, China got some more upbeat economic data as its industrial output in October rose 6.9%, year-on-year. Fixed-asset investment rose 1.8% in the January-October period, and retail sales were up 4.3% in October. China’s unemployment rate in October came in at 5.3%. China’s authoritarian regime was able to lock down the entire population early this year, to tamp down Covid-19, and its economy is now reaping the benefits. That compares to the democracies in the U.S. and Europe that were not able to completely control their populations and whose economies continue to struggle as Covid infections are in a steep ascent.
The U.S. dollar index is a bit weaker early today. The other important outside market sees crude oil prices higher and trading around $41.40 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.88%.
U.S. economic data due for release Monday is light and includes the Empire State manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage and are creeping back toward last week’s spike high. The 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 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 overnight high of 3,617.75 and then at 3,650.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,586.50 and then at 3,550.00. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage and have momentum. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 12,065.00 and then at 12,119.50. On the downside, shorter-term support is seen at 11,900.00 and then at 11,775.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid 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) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 172 22/32 and then at 173 even. Shorter-term support lies at the overnight low of 171 16/32 even and then at 171 even. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are down in early U.S. trading. Bears have the firm 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) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 138.08.0 and then at 138.16.0. Shorter-term technical support lies at the overnight low of 137.29.0 and then at 137.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are near steady in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1877 and then at 1.1894. Shorter-term support is seen at 1.1800 and then at last week’s low of 1.1753. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are higher in early U.S. trading. Bulls have the near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above 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 to bearish early today. Look for buy stops to reside just above technical resistance at $42.00 and then at last week’s high of $43.06. Look for sell stops just below technical support at $41.00 and then at the overnight low of $40.15. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. Corn and soybean futures last week hit contract highs amid continued strong export demand for U.S. grains. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place in all three markets. Traders will closely examine this morning’s weekly USDA export inspections report.
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