Tuesday, September 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly down and European shares mixed to firmer. U.S. stock indexes are set to open the New York day session mixed. Risk aversion is keener early this week as Covid-19 infections are on the rise in Europe and in parts of the U.S., prompting new worries about businesses locking down again. The death of Supreme Court Justice Ruth Bader-Ginsburg has shifted focus away from Congress providing a new stimulus package for U.S. citizens and businesses. U.S.-China trade and political tensions continue to run hot. And many in the marketplace believe the U.S. presidential election results will be disputed and protracted. All of the above may well keep stock market traders in a dour buying mood right in the middle of a time of year that history shows stock markets can get very wobbly.
Monday’s mostly downside price action in raw commodity futures markets, led by huge declines in gold and silver, rattled heretofore confident commodity bulls. If the raw commodity markets can show price stability the rest of this week, following Monday’s drubbing, most will escape with their near-term price uptrends still in place and with no technical damage. However, more solid downside price pressure this week would end most commodity markets’ near-term price uptrends. Thus, trading action the rest of this week will be extra important for many raw commodity markets.
Fed Chairman Powell and U.S. Treasury Secretary Mnuchin will testify to a House financial services committee Tuesday morning. Powell is expected to say the Congress needs to do more to keep the U.S. economy afloat.
The important outside markets today see the U.S. dollar index slightly higher following solid gains Monday that pushed the USDX to a six-week high. Nymex crude oil prices are firmer and trading around $40.00. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.67% today.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the Richmond Fed business survey, and existing home sales. Several Federal Reserve officials are slated to give speeches today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls are fading and prices are starting to trend lower on the daily chart. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 3,300.00 and then at Monday’s high of 3,326.25. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 3,250.00 and then at Monday’s low of 3,217.75. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls are fading and prices are starting to trend down on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at 11,163.00 and then at 11,288.50. On the downside, shorter-term support is seen at the overnight low of 10,897.50 and then at 10,750.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bulls are working on a near-term price uptrend. 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 last week’s high of 177 14/32 and then at 178 even. Shorter-term support lies at last week’s low of 175 28/32 and then at 175 16/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are steady in early U.S. trading. Bulls have the overall near-term technical advantage. 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 resistance lies at last week’s high of 139.24.0 and then at the September high of 139.29.0. Shorter-term technical support lies at last week’s low of 139.10.5 and then at 139.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading after hitting a seven-week low overnight. Bulls have the overall near-term technical advantage but are fading as trading has turned sideways at higher levels and the uptrend has stalled out. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance 1.1800 and then at 1.1850. Shorter-term support is seen at the overnight low of 1.1740 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above 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 $41.00 and then at last week’s high of $41.49. Look for sell stops just below technical support at Monday’s low of $38.66 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are higher in early U.S. pre-market trading, on corrective bounces from Monday’s solid losses. Bulls still have the near-term technical advantage in all three markets but need to stabilize prices following Monday’s sell off. If bulls can do that, they will keep near-term price uptrends in place and keep their chart edge.
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