Quieter marketplace as U.S. holiday approaches

Tuesday, November 21–Jim Wyckoff’s morning markets report

Asian and European markets were mixed to weaker in overnight trading. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. Marketplace attitudes are more upbeat, following recent U.S. inflation reports that came in tamer than expectations. The consumer and producer price index reports for October fell into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve halt its interest-rate-tightening cycle. More Fed watchers now believe the central bank will continue its pause on raising interest rates. The U.S. stock indexes rallied to multi-week highs this week in the wake of tamer U.S. inflation data. No more Fed rate hikes would mean less chance for an economic recession, lower borrowing costs and better consumer demand for goods and services. Stock market bulls are now looking for a seasonal Santa Claus rally heading into the holidays.

It’s a quieter trading week as the U.S. Thanksgiving holiday is on Thursday, and Friday is typically one of the quietest U.S. trading days of the year.

The key outside markets today see the U.S. dollar index slightly lower and hitting an 11-week low overnight. Nymex crude oil prices are slightly lower and trading around $77.50 a barrel. Reports said OPEC is considering more oil-production cuts. The cartel will meet this coming weekend in Vienna. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.414%. A Dow Jones Newswires headline today reads: “Bonds could be the star asset class of 2024.”

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the Chicago Fed national activity index, existing home sales and the FOMC minutes.

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,571.00 and then at 4,600.00. Support for active traders is seen at this week’s low of 4,520.00 and then at 4,500.00. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly down in early U.S. trading but hit a four-month high overnight. 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 16,122.50 and then at 16,250.00. On the downside, shorter-term support is seen at this week’s low of 15,837.25 and then at 15,700.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are slightly up and hit a seven-week high in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 116 16/32 and then at 117 even. Shorter-term support lies at this week’s low of 114 23/32 and then at 114 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the November high of 109.20.0 and then at 110.00.0. Shorter-term technical support is seen at this week’s low of 108.26.5 and then at 108.14.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The March Euro currency futures are near steady and hit an 11-week high in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are trending higher on the daily bar chart. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1020 and then at 1.1050. Shorter-term support is seen at this week’s low of 1.0955 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly lower 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $78.46 and then at $80.00. Look for sell stops just below technical support at this week’s low of $75.41 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Grain futures prices were a bit firmer in overnight trading. Not much new recently. Technicals remain overall bearish for corn and wheat, although my bias is that those markets have put in price bottoms, or are very close to doing so. Technicals are bullish for soybeans and meal as those markets are trending 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