Thursday, October 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down overnight. U.S. stock indexes are set to open the New York day session solidly lower. The worrisome spread of the Covid-19 virus in major industrialized countries and elsewhere, with Europe getting hit extra hard, has traders and investors in more risk averse modes late this week. France declared a state of emergency on Wednesday, regarding the spreading virus.
Reports Wednesday the U.S. Congress is nowhere close to a second, new major stimulus package for Americans has also dampened trader and investor sentiment. The marketplace is also getting a bit more jittery ahead of the U.S. elections in less than three weeks.
Reports this week say China is looking to punish foreign nations and companies by restricting their access to rare earth minerals. The National People’s Congress is expected to review draft legislation on the matter ahead of its potential decree and implementation next year. The law would be a serious threat to western manufacturers, even though China has been limiting the availability of key rare earth minerals for some time by using export quotas and selling mainly to companies with manufacturing bases in China.
The important outside markets early today see the U.S. dollar index higher. Nymex crude oil prices are lower and trading around $40.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.698% today.
The weekly U.S. jobless claims will be in focus during the U.S. trading session, with new claims seen at around 830,000 in the latest week.
Other U.S. economic data due for release Thursday includes the Empire State manufacturing survey, the Philadelphia Fed business survey, the weekly DOE liquid energy stocks report and import and export prices.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are down in early U.S. trading, on a corrective pullback after hitting a six-week high Monday. Bulls still have the firm overall near-term technical advantage. However, more price pressure in the near term would create a bearish double-top reversal pattern on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are still 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,486.50 and then at 3,500.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,433.75 and then at 3,400.00. Wyckoff’s Intra-day Market Rating: 3.5
December Nasdaq index futures: Prices are lower on a corrective pullback after hitting a six-week high on Tuesday. Shorter-term moving averages (4- 9-and 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,983.25 and then at 12,100.00. On the downside, shorter-term support is seen at the overnight low of 11,736.50 and then at 11,600.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher and hit a two-week high in early U.S. trading. Bulls are having a good week. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 176 7/32 and then at 176 16/32. Shorter-term support lies at the overnight low of 175 7/32 and then at 175 even. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at the overnight low of 139.13.0 and then at 139.16.0. Shorter-term technical support lies at the overnight low of 139.06.0 and then at 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
The December Euro currency futures are lower and hit a two-week low in early U.S. trading. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1772 and then at 1.1800. Shorter-term support is seen at the overnight low of 1.1717 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Price action has turned choppy and sideways. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $41.00 and then at the October high of $41.47. Look for sell stops just below technical support at this week’s low of $39.04 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 4.0
US grain futures are mixed to weaker in early U.S. pre-market trading. Markets this week are seeing a normal pause. Grain market bulls remain in firm technical control. This is normally a time of year when U.S. harvest pressure caps price gains. Such could continue to limit the upside in the near term.
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.