Friday, October 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in quieter overnight trading. U.S. stock indexes are also pointed narrowly mixed openings when the New York day session begins. The U.S. stock indexes are at or near record highs, to underscore the lack of risk aversion in the marketplace at this time. Also, the VIX (volatility index) has fallen to an all-time low. Other major world stock indexes are also on big bull runs.
Gold prices are weaker in pre-U.S.-day-session trading. Near-term price downtrends remain in place for the gold and silver markets and bears have the chart advantage in both. The bull market in equities has funneled money away from the safe-haven gold market.
Traders and investors are awaiting Friday morning’s U.S. employment report for September from the Labor Department. The key non-farm payrolls number is expected to come in at up only 80,000, according to a Dow Jones Newswires survey. The unusually low non-farm jobs growth estimate is due to two major hurricanes that hit the U.S. mainland in September. A big miss on the non-farm jobs number, from the forecast, may not rattle the markets too much, due to the uncertain impact of the major hurricanes.
There is growing speculation on who President Trump will appoint as the next chair of the Federal Reserve. There is no clear-cut consensus on who will be Trump’s pick.
The U.S. dollar index is slightly higher in early U.S. trading. The greenback bulls have been working the dollar index sideways to higher for the past few weeks. Meantime, the Euro currency has been suffering during that same time.
The other key outside market on Friday morning sees Nymex crude oil futures prices weaker. Oil gains have been capped this week by notions of rising U.S. crude oil production that is approaching 10 million barrels a day.
Other U.S. economic data due for release Friday includes the monthly wholesale trade report and the consumer credit report.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, after hitting a contract and record high on Thursday. The market is well overbought and due for a downside correction very soon. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,550.75 and then at 2,565.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,534.50 and then at this week’s low of 2,517.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly up and hit a contract and record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 6,075.00 and then at 6,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,050.00 and then at 6,025.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower and hit a nine-week low overnight. Prices are in a four-week-old downtrend on the daily bar chart. 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 technical resistance is seen at the overnight high of 152 12/32 and then at 153 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 151 28/32 and then at 151 16/32 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading, and near this week’s 2.5-month low. Bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. 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 resistance lies at the overnight high of 125 7/32 and then at Thursday’s high of 125.14.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 124.30.0 and then at 124.24.0. 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 near steady after hitting a 2.5-month high overnight. 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 neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.950 and then at 94.500. Shorter-term support is seen at 93.500 and then at 93.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the slight overall near-term technical advantage. However, there are stiff chart resistance layers that lie just overhead, to suggest that a market top is in place. Look for buy stops to reside just above technical resistance at $51.22 and then at this week’s high of $51.71. Look for sell stops just below technical support at this week’s low of $49.76 and then at $49.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures markets were slightly lower overnight. The bears have had the better week. I don’t look for any significant rallies right during the U.S. corn and soybean harvesting.