Tuesday, September 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight, as some risk aversion is back in the marketplace following Monday’s latest salvo from North Korea, in which the isolated nation said the U.S. had declared war on it. North Korea also said it had the right to shoot down U.S. warplanes outside of its air space. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
However, traders and investors are getting somewhat desensitized to the war of words between the U.S. and North Korea.
Gold prices are moderately lower in pre-U.S.-day-session trading, on a corrective pullback from good gains posted Monday. A stronger U.S. dollar so far this week is also a negative for the precious metals markets. Safe-haven demand will likely continue to at least limit the downside in the gold market.
Focus this week is also on central banker speeches. Federal Reserve Chair Janet Yellen delivers a speech Tuesday and Vice Chair Stanley Fischer talks Thursday. Other Federal Reserve officials will also give speeches throughout the week.
The key outside markets on Tuesday morning see the U.S. dollar index higher and hitting a four-week high overnight. Greenback bulls are starting out the week in strong fashion. Meantime, Nymex crude oil futures are modestly lower this morning after hitting a four-month high overnight. The oil bulls have the near-term technical advantage.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the consumer confidence index, new residential sales, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady 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 below the 9-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 contract high of 2,507.25 and then at 2,515.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,485.00 and then at 2,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly higher in early U.S. trading today. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below 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 5,900.00 and then at 5,925.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,862.75 and then at Monday’s low of 5,842.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 155 4/32 and then at 155 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 24/32 and then at Monday’s low of 154 2/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still 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 to bullish early today. Shorter-term resistance lies at Monday’s high of 126.04.5 and then at 126.09.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 125.23.0 and then at last week’s low of 125.17.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher and hit a four-week high in early U.S. trading. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 93.060 and then at 93.500. Shorter-term support is seen at the overnight low of 92.345 and then at Monday’s low of 92.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower in early U.S. trading, but did hit another four-month high overnight. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $52.43 and then at $53.00. Look for sell stops just below technical support at $51.00 and then at Monday’s low of $50.39. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were narrowly mixed overnight. U.S. harvest is picking up speed rapidly and will in full swing by the end of this week. Harvest hedge pressure will make it tough for corn and soybeans to make significant upside headway in the coming weeks.