Monday, October 2–Jim Wyckoff’s morning markets report
Asian and European stocks were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins.
Risk attitudes are more upbeat to start the trading week. In a last-minute effort to prevent a U.S. government shutdown, President Biden over the weekend signed into a law a stopgap measure to fund the federal government for 47 more days, through Nov. 17. Most of the marketplace figured the government would shut down over the weekend. However, the Senate, following a strong push from House Democrats, approved the measure in a lopsided vote. This 11th-hour decision ensures the continuation of various government services and the payment of federal employees, at least temporarily. However, lawmakers still need to finalize a permanent budget appropriation plan to address the nation’s financial needs.
China got some slightly upbeat economic data over the weekend as its factors in September reported their first expansion in activity since the spring. China’s manufacturing purchasing managers index (PMI) came in at 50.2 in September from 49.7 in August. A reading above 50.0 suggests expansion.
Reports say the Bank of Japan is closely watching the foreign exchange market as the yen continues to depreciate against the U.S. dollar.
Meantime, Comex gold futures prices hit a 10-month low overnight amid rising U.S. Treasury yields and the strong U.S. dollar.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $91.50 a barrel. Meantime, the benchmark `U.S. Treasury 10-year note yield is presently fetching 4.631%.
U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, construction spending and the global manufacturing PMI. Several Federal Reserve officials, including Fed Chair Powell, are scheduled to speak today.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar 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 last week’s high of 4,383.50 and then at 4,400.00. Support for active traders is seen at 4,300.00 and then at last week’s low of 4,277.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly higher in early U.S. trading, on short covering. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last week’s high of 15,060.75 and then at 15,200.00. On the downside, shorter-term support is seen at 14,750.00 and then at the September low of 14,586.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower 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 bearish early today. Shorter-term technical resistance is seen at Friday’s high of 114 24/32 and then at 115 even. Shorter-term support lies at the contract low of 112 10/32 and then at 112 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 107.29.5 and then at 108.00.0. Shorter-term technical support is seen at the contract low of 107.07.0 and then at 107.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
The December Euro currency futures are lower in early U.S. trading. Prices are trending lower and bears are in solid near-term technical control. 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 at the overnight high of 1.0627 and then at last week’s high of 1.0693. Shorter-term support is seen at the September low of 1.0525 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Friday’s high of $93.10 and then at the September high of $95.03. Look for sell stops just below technical support at $89.00 and then at last week’s low of $88.18. Wyckoff’s Intra-Day Market Rating: 6.0
Grain futures prices were mixed in overnight trading. Harvest pressure in soybeans and corn is in full swing and that is a bearish seasonal factor. Technicals remain fully bearish for corn and wheat, and moderately bearish for soybeans and meal. On tap today is the weekly USDA export inspections report and the USDA crop progress reports.
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.