Tuesday, September 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are also pointed to lower openings when the New York day session begins. There is keener risk aversion in the marketplace early this week. Rising bond yields have gotten the attention of traders and investors. The 10-year U.S. Treasury note yield is presently fetching 1.529% and at a three-month high. The major central banks of the world are preparing to wind down their easy-money policies of the past many years and that’s bearish for bond prices.
Federal Reserve Chairman Powell and U.S. Treasury Secretary Yellen will appear before a Senate committee Tuesday morning to discuss the U.S. economy and monetary policy.
Also of concern, European countries and China are experiencing serious energy shortages that are not expected to be resolved anytime soon. Nymex crude oil futures prices are higher again today and trading around $76.25 a barrel. Meantime, natural gas futures prices are at a seven-year high. Rising energy prices heading into winter are sapping some trader and investor enthusiasm, especially in Europe, where some panic buying of gasoline is already occurring.
Focus this week is also on U.S. government spending. President Biden’s infrastructure package is set for a House of Representatives vote on Thursday, while the U.S. government’s funding will expire at midnight Thursday, which if not extended, would shut down part of the government Friday. Some anxiety in the market place is already surfacing as Republicans shot down one plan to keep the government running. Democrats said they are working on another plan.
The other key outside market today sees the U.S. dollar index higher.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales reports, the monthly house price index, the S&P Core-Logic home price indexes, the Richmond Fed business survey, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,442.00 and then at Monday’s high of 4,472.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,388.00 and then at 4,375.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are sharply lower in early U.S. trading. 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 below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 15,192.25 and then at Monday’s high of 15,399.25. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the September low of 14,807.50 and then at the August low of 14,699.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are sharply lower and hit a 2.5.-month low in early U.S. trading. Prices have seen a bearish downside “breakout” from a trading range at higher levels. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 160 26/32 and then at Monday’s high of 161 8/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 7/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
December U.S. T-Notes: Prices are solidly lower and hit a three-month low 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 bearish early today. Shorter-term resistance lies at the overnight high of 131.27.0 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.09.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The December Euro currency futures are lower and hit a 14-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1743 and then at last week’s high of 1.1775. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1688 and then at 1.1650. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a 2.5-month high overnight. Bulls are in solid technical control. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $76.67 and then at $77.00. Look for sell stops just below technical support at the overnight low of $75.21 and then at Monday’s low of $74.16. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were mixed to weaker overnight. Risk aversion in the market place has the grain market bulls tentative today. Look for the grains to continue to be more impacted by outside market forces—namely global stock markets–for the near term. The corn and soybean market bears still have the near-term technical advantage, while the wheat bulls are showing some resilience and have the slight near-term technical advantage.
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