Wednesday, September 21–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins. Risk aversion remains elevated at mid-week following news that Russian President Putin will partially mobilize more Russian troops to fight in his war with Ukraine, including implying in a speech that he could use nuclear weapons if Russia’s integrity is threatened. One analyst said the longer the war drags on and with Russia making little if any further progress, the more threatened Putin will become, which could prompt the dictator to take more drastic measures to ensure his own survival.
Gold is getting a significant safe-haven bid on the Putin speech news. In recent months gold had tended not to see much, if any, safe-haven demand on global concerns that have been present, but apparently not worrisome enough to significantly boost gold and silver prices. The precious metals traders apparently reckon Putin’s threats area big deal.
The Federal Reserve’s FOMC meeting that began Tuesday morning ends this afternoon with a statement and press conference from Fed Chairman Jerome Powell, including fresh “dot plots” on the U.S. economy. The FOMC is expected to raise the key U.S. Fed funds rate by 0.75% in the Fed’s effort to tamp down problematic price inflation. The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.
The key outside markets today see Nymex crude oil prices higher and trading around $84.50 a barrel. The U.S. dollar index is higher and pushed to another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.542%. The 2-year Treasury note yield is 3.961%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. 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 to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,936.25 and then at 3,981.25. Support for active traders is seen at this week’s low of 3,843.25 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 12,092.50 and then at 12,268.75. On the downside, shorter-term support is seen at the September low of 11,778.50 and then at 11,600.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid advantage. 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 technical resistance is seen at this week’s high of 131 10/32 and then at 132 even. Shorter-term support lies at the overnight low of 129 27/32 and then at the contract low of 129 6/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading on short covering. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 the overnight high of 114.07.5 and then at Tuesday’s high of 114.17.0. Shorter-term technical support lies at the contract low of 113.20.5 and then at 113.10.0. 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 and hit a two-week low in early U.S. trading. Bears have the solid 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0040 and then at this week’s high of 1.0116. Shorter-term support is seen at the contract low of .9935 and then at .9900. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
November Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-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 $88.00 and then at $90.00. Look for sell stops just below technical support at $85.00 and then at today’s low of $83.48. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were higher overnight. Grain markets are boosted at mid-week on comments from Russian President Putin that he may not extend the grain-shipping deal with Ukraine that expires in November. Corn and soybean market bulls have the overall near-term technical advantage. Wheat bulls have the slight overall near-term technical edge and have restarted price uptrends on the daily charts.
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