Friday, September 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World equity markets were mostly weaker overnight as risk aversion has quickly returned to the marketplace ahead of the weekend. North Korea has threatened to detonate a huge hydrogen bomb over the Pacific Ocean. “Rocketman” Kim Jong Un has vowed to use “hard-line countermeasures” in response to President Trump’s threat earlier this week to destroy North Korea. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.
Gold prices are showing modest gains on renewed safe-haven demand, some bargain hunting from recent losses, and on short covering in the futures market. Silver prices are also slightly up, following gold.
In other overnight news, the Euro zone Markit composite purchasing managers’ index (PMI) rose to 56.7 in September from 55.7 in August. A reading of 55.6 was expected. A number above 50.0 suggests growth in the sector.
The key outside markets on Friday morning see the U.S. dollar index lower. Most of Wednesday’s strong gains have now been given back. Greenback bears have the solid near-term technical advantage. Meantime, Nymex crude oil futures are near steady this morning. The oil bulls have the slight near-term technical advantage as prices hover above $50 a barrel.
U.S. economic data due for release Friday includes the flash services PMI and the flash manufacturing PMI.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on profit taking after prices this week hit contract and record highs. 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 with 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 the overnight low of 2,492.00 and then at 2,487.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index December futures: Prices are lower and hit a two-week low in early U.S. trading today. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 5,950.00 and then at Thursday’s high of 5,980.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,911.00 and then at 5,900.00. 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 higher in early U.S. trading, on short covering and safe-haven buying. 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 bullish early today. Shorter-term technical resistance is seen at 154 23/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at 154 even and then at this week’s low of 153 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading, on safe-haven demand and short covering. 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 126.00.0 and then at 126.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.24.0 and then at this week’s low of 125.17.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at 92.000 and then at this week’s high of 92.495. Shorter-term support is seen at the overnight low of 91.575 and then at this week’s low of 91.215. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage. Prices Wednesday hit a four-month high. Look for buy stops to reside just above technical resistance at this week’s high of $50.79 and then at $51.00. Look for sell stops just below technical support at $50.00 and then at this week’s low of $49.68. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were higher overnight, on short covering and bargain hunting. U.S. harvest is picking up speed and will soon be in full swing. Harvest hedge pressure will make it tough for corn and soybeans to make significant upside headway.