Wednesday, October 18–Jim Wyckoff’s morning markets report
Asian and European stocks were mixed to weaker overnight. U.S. stock indexes are pointed to weaker openings when the New York day session begins. Risk aversion has up-ticked at mid-week after a bombing at a hospital in Gaza has reportedly killed over 500 people. Hamas blamed an Israel air strike, while Israel blamed an errant Hamas missile. Reads a Barrons headline today: “Rate fears, bond yields, war; market concern grows.”
Gold prices are sharply up and at a four-week high above $1,950 an ounce, on keener safe-haven demand after the Gaza hospital was bombed.
In overnight news, China got some mixed economic data today. China’s third-quarter GDP came in at up 4.9%, year-on-year, helped by resilient consumer spending. However, China’s third-quarter GDP came in below the second quarter’s reading of up 6.3%, year-on-year. That puts the world’s second-largest economy on course to hit an annual GDP target of around 5% for 2023, Bloomberg reported. GDP got a boost from strong retail sales in September that posted the biggest increase since May. On the downside, China property investment contraction accelerated during September. Home sales continued to decline and construction of new homes dropped almost 24% in the first nine months of the year. Funding for property development dropped 13.5%, year-on-year.
In other overnight news, the Euro zone September consumer price index rose 4.3%, year-on-year, which was right in line with market expectations.
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are solidly higher and trading around $89.25 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.82%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report, new residential construction and the monthly Treasury budget statement.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker 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 even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the October high of 4,430.50 and then at 4,450.00. Support for active traders is seen at this week’s low of 4,354.50 and then at last week’s low of 4,299.50. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are weaker in early U.S. trading. 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 15,336.75 and then at the October high of 15,468.75. On the downside, shorter-term support is seen at 15,000.00 and then at 14,900.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady 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. 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 Tuesday’s high of 111 17/32 and then at this week’s high of 112 27/32. Shorter-term support lies at this week’s low of 109 17/32 and then at 109 even. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are higher in early U.S. trading after hitting a contract low overnight. 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 neutral early today. Shorter-term resistance lies at 107.00.0 and then at 107.10.0. Shorter-term technical support is seen at the overnight contract low of 106.03.0 and then at 106.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
The December Euro currency futures are slightly down in early U.S. trading. Bears are in firm overall near-term technical control. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0622 and then at the October high of 1.0668. Shorter-term support is seen at 1.0523 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are solidly up and hit a two-week high in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at $91.00. Look for sell stops just below technical support at the overnight low of $87.64 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 7.0
Grain futures prices were higher in overnight trading on short covering. Less risk appetite in the marketplace at present will likely continue to limit the upside for the grains in the near term. Harvesting of soybeans and corn is past the half-way point and that has been a bearish seasonal factor amid commercial hedge selling. Technicals are still overall bearish for corn, wheat and soybeans.
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.