Thursday, October 19–Jim Wyckoff’s morning markets report
Rising bond yields and high tensions in the Middle East are also squelching the equities market bulls late this week. Reports said Hamas is firing more missiles into Israel. This comes after an explosion at a Gaza hospital killed over 500 people earlier this week. U.S. and Israeli intelligence say the explosion was caused by Palestinian militants.
The U.S. marketplace highlight of the day Thursday is Federal Reserve Chairman Jerome Powell’s speech to the Economic Club of New York in the afternoon.
In overnight news, the big China property developer Country Garden has missed a $15.4 million debt payment on a dollar bond. The Wall Street Journal said this caps “a remarkable fall from grace for a company that was once considered among the safest developers in the country.”
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are lower and trading around $87.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is closing in on 5.0% and is presently fetching 4.96%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, and leading economic indicators.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. 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 to bearish early today. Today, shorter-term technical resistance comes in at 4,400.00 and then at the October high of 4,430.50. Support for active traders is seen at the overnight low of 4,320.75 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly up in early U.S. trading. 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 15,150.00 and then at this week’s high of 15,336.75. On the downside, shorter-term support is seen at the overnight low of 14,937.00 and then at 14,800.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower and hit another contract low in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 110 12/32 and then at Wednesday’s high of 111 17/32. Shorter-term support lies at the contract low of 108 8/32 and then at 108 even. Wyckoff’s Intra-Day Market Rating: 3.0
December U.S. T-Notes: Prices are lower and hit a contract low in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 106.00.0 and then at Wednesday’s high of 106.15.5. Shorter-term technical support is seen at the overnight contract low of 105.12.5 and then at 105.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears are in firm overall near-term technical control. 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 even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0622 and then at the October high of 1.0668. Shorter-term support is seen at 1.0523 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below 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 the overnight high of $88.42 and then at $90.00. Look for sell stops just below technical support at the overnight low of $86.60 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed to firmer in overnight trading. Less risk appetite in the marketplace at present continues to limit the upside for the grains in the near term, although soybean and soybean meal bulls have come to life. Technicals are still overall bearish for corn, wheat and soybeans. On tap today is the weekly USDA export sales report.
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