Monday, November 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk sentiment is more upbeat to start the trading week, as another vaccine trial, this time from the U.K.’s Oxford University and AstraZeneca, was shown to be 90% effective. There is a general consensus in the marketplace that by the second half of 2021 the pandemic will be tamped down and economies will be well on the road to returning to normal. Still, there were more than 142,000 new U.S. Covid-19 infections reported Sunday and record hospitalizations for the 13th straight day, suggesting the pandemic is still raging out of control. Europe is also reeling from the impact of the virus.
The Euro zone flash purchasing managers index (PMI) showed the region heading toward a possible double-dip recession, with November’s data the first since severe lockdown measures were re-introduced in many areas. The flash composite PMI fell to 45.1 in November vs 50.0 in October. The Euro zone manufacturing PMI fell to 53.6 vs 54.8 last month and 53.1 expected. The services PMI fell to 41.3 vs 46.9 in October and 42.5 expected.
The U.S. dollar index is lower early today and hit a seven-week low. The other important outside market sees January Nymex crude oil futures prices firmer and trading around $42.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash manufacturing PMI, and the flash services PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage and prices are not far below the recent high. 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 early today. Today, shorter-term technical resistance comes in at 3,600.00 and then at last week’s high of 3,637.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 3,542.25 and then at 3,525.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage, but stiff resistance layers lie just above the market. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-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 last week’s high of 12,096.25 and then at the October high of 12,249.00. On the downside, shorter-term support is seen at the overnight low of 11,891.50 and then at last week’s low of 11,804.50. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 174 even and then at last week’s high of 174 9/32. Shorter-term support lies at the overnight low of 173 13/32 and then at 173 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 138.17.5 and then at last week’s high of 138.20.0. Shorter-term technical support lies at the overnight low of 138.09.0 and then at 138.04.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the November high of 1.1954 and then at 1.2000. Shorter-term support is seen at the overnight low of 1.1890 and then at 1.1850. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer in early U.S. trading and hit an 11-week high. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $43.36 and then at $44.00. Look for sell stops just below technical support at the overnight low of $42.29 and then at Friday’s low of $41.61. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are solidly higher in early U.S. pre-market trading. The grain market bulls have the firm near-term technical advantage amid price uptrends in place in all three markets. There are no strong, early clues to suggest that market tops are close at hand. On tap today will be the weekly USDA export inspections 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