Tuesday, October 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. U.S. stock indexes are set to open the New York day session slightly up. The global marketplace remains jittery as Covid-19 pandemic infections are on the rise in much of the world, including Europe and the U.S. There are worries new lockdowns are coming this winter, even though they may not be as extreme as seen last spring. Europe is already starting to ramp up its quarantine of some business activities. No vaccine for the virus is close to being released for general distribution.
With just one week to go before the U.S. elections, many markets could pause until after the election results are in. Many traders will want to step away from the markets, or take some risk off the table, due to the still highly uncertain outcome of the presidential election.
Major central bank monetary policy meetings this week see the Bank of Canada Wednesday, and European Central Bank and Bank of Japan both meeting Thursday. Deflation has become a bigger concern in Europe.
The important outside markets early today see the U.S. dollar index near steady. Nymex crude oil prices are higher and trading around $39.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.8% today.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, durable goods orders, the monthly house price index, the S&P Core Login housing indexes, the Richmond Fed business survey, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls are fading as a big and bearish double-top reversal pattern could be forming 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 and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,446.25 and then at last Friday’s high of 3,562.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 3,356.00 and then at 3,325.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer 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 and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 11,695.50 and then at 11,800.00. On the downside, shorter-term support is seen at Monday’s low of 11,343.25 and then at 11,250.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Bears are in near-term control. 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) bullish early today. Shorter-term technical resistance is seen at Monday’s high of 173 30/32 and then at 174 16/32. Shorter-term support lies at 173 even and then at Monday’s low of 172 22/32. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady 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 neutral to bullish early today. Shorter-term resistance lies at Monday’s high of 138.23.0 and then at 138.28.0. Shorter-term technical support lies at Monday’s low of 138.11.0 and then at last week’s low of 138.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are near steady in early U.S. trading. Bulls are still working on a price uptrend on the daily 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 Monday’s high of 1.1872 and then at last week’s high of 1.1894. Shorter-term support is seen at 1.1800 and then at 1.1773. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer on short covering after hitting a three-week low on Monday. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-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 Monday’s high of $39.74 and then at $40.00. Look for sell stops just below technical support at Monday’s low of $38.28 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. Grain market bulls still have solid technical control amid uptrends firmly in place on the charts. There are no early technical clues to suggest the corn, soybean or wheat markets are near their tops.
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