Monday, September 25–Jim Wyckoff’s morning markets report
Traders and investors are in risk-off moods to start the trading week, amid the high potential for a U.S. government shutdown. The U.S. House and Senate return Tuesday after a long weekend in observance of Yom Kippur. The Senate will vote on a measure Tuesday to take up a short-term funding solution, called a continuing resolution.
In overnight news, China property developer Evergrande’s stock plunged as much as 25% Monday after the developer said it cannot meet regulator conditions to issue new bonds as part of its planned restructuring of at least $30 billion of offshore debt, according to Bloomberg.
The key outside markets today see the U.S. dollar index slightly higher and near a 6.5-month high. Nymex crude oil prices are firmer and trading around $90.50 a barrel. The benchmark U.S. Treasury 10-year note yield is presently at a multi-year high and fetching around 4.5%–the highest since 2007.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading and hit a 3.5-month low overnight. Bulls are fading as prices are in a two-month-old downtrend on the daily bar chart. 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 4,400.00 and then at 4,447.00. Support for active traders is seen at the overnight low of 4,347.25 and then at 4,325.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are weaker hit a five-week low in overnight trading. 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 is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 15,000.00 and then at 15,149.00. On the downside, shorter-term support is seen at the August low of 14,792.75 and then at 14,700.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower 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 the overnight high of 117 even and then at 117 28/32. Shorter-term support lies at the contract low of 115 23/32 and then at 115 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower 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 bearish early today. Shorter-term resistance lies at the overnight high of 108.25.5 and then at 109.00.0. Shorter-term technical support is seen at the contract low of 108.08.0 and then at 108.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading. Prices are trending lower and bears are in solid near-term technical control. 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 Friday’s high of 1.0711 and then at last week’s high of 1.0778. Shorter-term support is seen at last week’s low of 1.0653 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 Friday’s high of $91.33 and then at last week’s high of $92.43. Look for sell stops just below technical support at last week’s low of $88.37 and then at $87.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were weaker in overnight trading. On tap today is the weekly crop progress and export inspections reports. Harvest pressure in soybeans and corn has moved into full swing. That is a bearish seasonal factor due to commercial hedge pressure as farmers take their crops to the local elevators. Technicals remain fully bearish for corn and wheat, and moderately bearish for soybeans and meal.
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