Thursday, October 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly up overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. U.S. stock indexes are near this week’s record highs. Japan’s Nikkei stock index hit another 21-year high overnight. Stock market traders are not paying much attention to geopolitics at present, as their risk appetites remain strong.
Gold and silver prices are higher and hit two-week highs in pre-U.S.-session trading. The slumping U.S. dollar this week is a bullish element for the precious metals markets.
In overnight news, Euro zone industrial production in August was reported up 1.4% from July and up 3.8%, year-on-year. Those numbers were much stronger than expected and fall into the camp of the monetary policy hawks, who want the European Central Bank to start to tighten monetary policy.
The U.S. dollar index is slightly higher in early U.S. trading Wednesday, but did hit a two-week low overnight. The greenback bears have gained downside momentum this week. The other key outside market sees Nymex crude oil futures prices lower and trading just below $51.00 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the producer price index, the weekly DOE liquid energy stock report, and the monthly Treasury budget statement. There are also several Federal Reserve officials set to deliver speeches today.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract and record high on Wednesday. The market is way overbought and due for a decent downside correction soon. 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,553.50 and then at 2,565.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,539.25 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are near steady and very close to this week’s contract and record high. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the contract high of 6,088.50 and then at 6,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,039.00 and then at 6,025.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices are still in a four-week-old downtrend on the daily bar chart, but now just barely. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 153 2/32 and then at 153 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 10/32 and then at this week’s low of 151 28/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading. Bears still have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart, but now just barely. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 125 14/32 and then at 125.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.05.0 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading, but did hit a two-week low overnight. Bulls are fading this week. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 93.190 and then at this week’s high of 93.670. Shorter-term support is seen at the overnight low of 92.635 and then at 92.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Bulls have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at this week’s high of $51.42 and then at $52.00. Look for sell stops just below technical support at $50.00 and then at the October low of $49.10. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were slightly up overnight. Traders are awaiting this morning’s monthly USDA supply and demand report. Soybean bulls and bears are on a level overall near-term technical playing field. Wheat and corn bears have the solid chart advantage at present. However, I still do not think there is much downside left in the grains following the selling pressure in recent months.