Friday, September 20–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly up in trading overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. It looks to be a quieter end to the trading week as the world marketplace has calmed down significantly after traders came to work Monday dealing with a major geopolitical shock after last weekend’s attack on Saudi Arabian oil installations.
However, many futures traders in many markets will not want to go home for the weekend with big positions, as it still appears the U.S. and Iran are on a collision course at some point down the road.
Nymex crude oil prices are higher and trading around $58.75 a barrel. The other key outside market today sees the U.S. dollar index trading slightly up.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 last week’s high of 3,025.75 and then at the contract high of 3,032.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,980.75 and then at 2,970.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid overall technical advantage. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 7,973.25 and then at the September high of 8,002.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,900.00 and then at Thursday’s low of 7,852.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Bulls are having a good week. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 160 31/32 and then at 161 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 159 17/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term support lies at Thursday’s low of 129.03.5 and then at 129.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at Thursday’s high of 129.22.5 and then at this week’s high of 129.27.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 98.290 and then at 98.500. Shorter-term support is seen at 97.75 and then at last week’s low of 97.560. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. But it still appears this week’s spike high is a peak, unless there is a military flare-up in the Middle East. Prices are in a five-week-old uptrend on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-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 Thursday’s high of $59.54 and then at $60.00. Look for sell stops just below technical support at $58.00 and then at this week’s low of $57.67. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were steady to firmer in overnight trading. Traders are generally upbeat late this week as the geopolitical situation has calmed down dramatically this week, following last weekend’s attacks on Saudi oil installations. Also, the past two weeks have seen the U.S.-China trade tensions ratchet down significantly. The two sides are talking again, with some reports saying an interim trade deal could be announced soon. Those reports say President Trump is demanding China buy more U.S. agricultural products. Recent price action and the technical charts suggest “harvest lows” are in place for grain futures prices. However, worldwide demand for US grains will have to pick up from present levels in order for price uptrends to be sustained in the US corn, soybean and wheat futures markets. Weather in the US Corn Belt remains warm but too wet in some areas. There are no worries regarding a killing frost for the region. Next week the harvesting pace for U.S. soybeans and corn will start to pick up.
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