Friday, October 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins, with the S&P stock index futures poking to a new contract and record high overnight. Very upbeat corporate earnings reports have boosted trader and investor risk sentiment the past couple weeks. For the moment it appears the marketplace has pushed to the back burner rising inflation and the prospect of major global economies slowing down in their post-pandemic recoveries. Dow Jones Newswires ran a story this morning headlined, “Supply-chain bottlenecks crimp global growth, boost inflation.” The report said worsening supply chain constraints around the world and the record surge in the price of some raw materials “is dragging on the world economy, suggesting a slowdown this summer will extend through the end of this year.”
It appears the gold and silver markets have finally awakened to the fact global inflation is rising and probably won’t be just transitory. Gold prices have been trending higher since late-September and silver prices this week hit a six-week high. History shows hard assets like the precious metals become more in favor as an inflation hedge when consumer and producer prices are rising.
The key outside markets today see the U.S. dollar index weaker. Crude oil prices are higher and trading around $82.80 a barrel after hitting a seven-year high Thursday. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.685%.
U.S. economic data due for release Friday includes the flash manufacturing and services purchasing managers indexes.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are a bit higher and hit a record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,550.00 and then at 4,575.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 4,471.75 and then at this week’s low of 4,436.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are slightly down in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 15,483.75 and then at 15,600.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Tuesday’s low of 15,269.00 and then at this week’s low of 15,038.75. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly weaker 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 early today. Shorter-term technical resistance is seen at the overnight high of 158 even and then at 158 15/32. Buy stops likely reside just above those levels. Shorter-term support lies at the October low of 157 3/32 and then at 156 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker 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 early today. Shorter-term resistance is seen at the overnight high of 130.07.5 and then at 130.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 129.31.0 and then at 129.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are firmer in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1681 and then at 1.1700. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1620 and then at this week’s low of 1.1584. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid near-term technical advantage. 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 in at this week’s high of $83.96 and then at $85.00. Look for sell stops just below technical support at the overnight low of $81.76 and then at this week’s low of $80.79. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were higher overnight. Bulls have had a good week. Inflation worries and some global raw commodity supply shortages are likely luring speculative buying interest into the grain markets and that could continue to push prices higher.
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