Friday, November 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. Surging Covid cases in the U.S. and Europe are back on the front burner of the marketplace late this week. Austria will go into a nationwide lockdown Monday. Germany is going into a partial lockdown. The rise in Covid cases in major economies has prompted worries about slowing global economic growth, and in turn crude oil prices have dropped sharply recently and are at six-week lows. And then there are inflation worries and the potential for “stagflation”—slowing economic growth and rising inflation. However, all of the above have been offset by very upbeat corporate earnings reports for the third quarter that are keeping the S&P 500 and Nasdaq stock indexes near this week’s record highs.
The Turkish lira is sliding again and hit a record low against the U.S. dollar overnight. Turkey’s central bank lowered its interest rates despite rising inflation.
The key outside markets today see the U.S. dollar index higher and near this week’s 15-month high. Nymex crude oil prices are solidly lower and trading around $77.00 a barrel. Oil prices overnight hit a six-week low as it appears the crude market has put in a near-term top. There is talk the U.S. and China may tap their strategic oil reserves to help ease higher gasoline prices. The 10-year U.S. Treasury note yield is presently fetching 1.555%. For perspective, the German 10-year bund yield is presently at -0.328%.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading and hit a record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight contract and record high of 4,723.50 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,684.25 and then at 4,650.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are higher in early U.S. trading and hit a record high. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 16,590.00 and then at 16,700.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 16,303.50 and then at this week’s low of 16,092.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 162 even and then at 162 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 161 even and then at the overnight low of 160 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
December U.S. T-Notes: Prices are higher in early U.S. trading. 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 bullish early today. Shorter-term resistance is seen at the overnight high of 131.01.0 and then at 131.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.24.0 and then at the overnight low of 130.13.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The December Euro currency futures are solidly lower in early U.S. trading and back near this week’s 16-month low. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.1350 and then at 1.1400. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1268 and then at 1.1200. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower in early U.S. trading and hit a six-week low. Bulls have faded badly recently to suggest a market top is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $77.00 and then at $78.00. Look for sell stops just below technical support at $76.00 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were lower overnight, as risk aversion is keener to end the trading week. Normal profit taking and some chart consolidation is featured after recent good gains. The soybean meal futures market is still trending solidly higher, which signals a market bottom is in place for soybeans. Corn and wheat bulls have the near-term technical advantage amid price uptrends in place on the daily charts. Wheat is the grain market leader on the upside, at present.
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