Monday, October 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There is still risk aversion in the marketplace after last week’s high volatility in the world stock markets, led by the U.S. stock indexers that hit 3.5-month lows.
Gold prices today hit a 10-week high on more safe-haven demand and more short covering in the futures market. Gold could be getting some safe-haven buying interest due to the growing rift between the U.S. and Saudi Arabia regarding a missing Saudi journalist who many think was killed by the Saudi Kingdom. President Trump said there would be “severe punishment” of the Saudi Kingdom if it was determined it killed the journalist. A Saudi government official said his country could retaliate against the U.S. by driving crude oil up to a price of over $100 or $200 a barrel, or higher.
The key outside markets today find the U.S. dollar index lower on a corrective pullback from recent gains. Meantime, November Nymex crude oil prices are firmer on a corrective bounce from recent selling pressure that begins to suggest that market has topped out.
U.S. economic data due for release Monday includes retail sales, the Empire State manufacturing survey, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Last week’s price action strongly suggests that at least a near-term market top is in place, if not a major top. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,771.25 and then at Friday’s high of 2,785.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,745.25 and then at 2,725.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index December futures: Prices are lower in early U.S. trading. Recent price action strongly suggests a near-term market top is in place, if not a major market top. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,179.00 and then at 7,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,080.50 and then at 7,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S. trading today. Bears have the solid overall near-term technical advantage as a six-week-old downtrend is in place on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at last week’s high of 138 31/32 and then at 139 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 138 10/32 and then at 138 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. 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 last week’s high of 118.14.5 and then at 118.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.05.0 and then at 118.00.0. 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 weaker in early U.S. trading. Bulls still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.060 and then at 95.470. Shorter-term support is seen at last week’s low of 94.640 and then at 94.500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher in early U.S. trading, on a corrective bounce from recent strong selling pressure that still suggests this market has topped out. The bulls have the overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.70 and then at $73.00. Look for sell stops just below technical support at the overnight low of $71.27 and then at last week’s low of $70.51. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were weaker overnight. Traders are awaiting today’s weekly USDA export inspections report. While market bottoms look to be in place for all three major grain markets, the upside is limited by big U.S. corn and soybean crops being harvested—despite current harvest delays. Still, my bias is for choppy and sideways-to-higher price action into the end of this year.
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