Tuesday, November 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are headed for slightly higher openings when the New York day session begins. Risk appetite remains muted early this week as Covid cases surge in China. News reports are calling China’s largest city, Beijing, a “ghost town.” Some analysts are saying 20% of China’s economy is being negatively impacted by the Covid lockdowns.
Wednesday will be the busiest day for U.S. economic data, including the minutes from the last FOMC monetary policy meeting, to be released in the early afternoon. A Barron’s headline today reads: “Don’t tune out for the holidays; the Fed minutes will be a must watch.” The minutes may contain fresh clues on the future path and timing of Fed monetary policy.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are firmer and trading around $80.50 a barrel. The crude oil market was roiled Monday by reports Saudi Arabia is contemplating raising its crude oil production—only to have Saudi officials deny the report. Oil prices fell to an 11-month low shortly after the news reports hit the wires. The yield on the benchmark U.S. 10-year Treasury note is presently 3.793%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend 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 below 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 4,000.00 and then at the November high of 4,050.75. Support for active traders is seen at last week’s low of 3,912.50 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 11,756.00 and then at 12,000.00. On the downside, shorter-term support is seen at 11,500.00 and then at 11,400.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher 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 to bullish early today. Shorter-term technical resistance is seen at the Monday’s high of 126 7/32 and then at the November high of 126 16/32. Shorter-term support lies at 125 even and then at 124 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 113.00.0 and then at 113.10.0. Shorter-term technical support lies at Monday’s low of 112.11.5 and then at 112.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below 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 Monday’s high of 1.0417 and then at 1.0500. Shorter-term support is seen at Monday’s low of 1.0316 and then at 1.0250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are higher in early U.S. trading. Bears have the near-term technical advantage as a fledgling price downtrend is in place on the daily bar chart. The shorter-term moving averages are bearish early today as the 4-day is below 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 $82.00 and then at $83.00. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed in overnight trading. Bulls are being squelched due to demand worries amid the China Covid lockdowns. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the near-term technical advantage. Grain traders will continue to closely monitor the key outside markets: the U.S. dollar index and crude oil prices.
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