Thursday, November 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European stock markets were mixed overnight, while Asian shares were mostly firmer. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on a corrective pullback from Wednesday’s solid gains.
Risk appetite in the world marketplace is mostly upbeat following the U.S. mid-term elections that produced a divided Congress.
In overnight news, upbeat economic data out of China defied expectations that its trade war with the U.S. is crimping its economy. China’s exports in October rose by 15.6%, year-on-year. That handily beat expectations of an 11% increase. Imports in October were up 21.4%, year-on-year. Imports from the U.S. dropped 1.8%. This data suggests China could be in no hurry to settle its trade dispute with the U.S. However, as has been the case for years, some do question the veracity of China’s economic numbers.
Meantime, economic data out of the European Union showed the Euro zone’s 2018 economic growth is seen at 2.1%, with 2019 GDP seen at 1.9% and then at 1.7% in 2020. The report estimates 2018 and 2019 inflation for the Euro zone at an annual rate of 1.8%.
Focus today is on the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Wednesday morning and ends with a statement Thursday afternoon. No change in U.S. interest rates is expected. As always, traders will scrutinize wording of the FOMC statement and Chairman Jay Powell’s remarks at his press conference, for clues on the future direction and timing of U.S. monetary policy.
The key “outside markets” today find the U.S. dollar index higher on a rebound from selling pressure seen this week. Meantime, Nymex crude oil prices are slightly higher and trading just below $62.00 a barrel. Nymex oil prices this week hit a seven-month low.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report and the monthly chain store sales index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker on a corrective pullback after hitting a three-week high overnight. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-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 the overnight high of 2,818.00 and then at 2,815.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,780.00 and then at 2,760.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are lower in early U.S. trading after hitting a three-week high overnight. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 7,231.00 and then at 7,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,150.00 and then at 7,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S. trading today. Prices hit a four-week low Wednesday. Bears have the firm overall near-term technical advantage. 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 early today. Shorter-term technical resistance is seen at 137 16/32 and then at this week’s high of 138 3/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 136 31/32 and then at this week’s low of 136 24/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are lower in early U.S. trading. Prices Wednesday hit a four-week low. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 118.00.0 and then at this week’s high of 118.08.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 117.25.0 and then at this week’s low of 117.23.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher in early U.S. trading today. Bulls still have the overall near-term technical advantage. 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 96.285 and then at this week’s high of 96.510. Shorter-term support is seen at the overnight low of 95.895 and then at this week’s low of 95.485. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly higher in early U.S. trading, on tepid short covering from recent solid selling pressure that pushed prices to a seven-month low on Wednesday. Bears are still in firm near-term technical control. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $62.50 and then at $63.00. Look for sell stops just below technical support at this week’s low of $61.20 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were higher overnight, on short covering and some bargain hunting. The grain market bears still have the overall near-term technical advantage. Traders are awaiting this morning’s monthly USDA supply and demand report and USDA weekly export sales report for direction.
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