Monday, September 21–Jim Wyckoff’s Morning Markets Report
Global stock markets lower overnight, with U.S. stock indexes also set to open the New York day session with solid losses. Risk aversion is back in the marketplace to start the trading week, due to several matters. The death of U.S. Supreme Court justice Ruth Bader Ginsburg has thrown the U.S. Congress into turmoil regarding when a new justice will be voted upon. The intense debate and focus regarding such has apparently pushed a new U.S. economic stimulus package to the back burner. A significant rise in Covid-19 cases in Europe, and especially the U.K., has many thinking the Euro Zone could see many businesses go on lockdown again amid a “second wave” of infections. And, throw in rising U.S.-China trade and political tensions to make traders and investors even more anxious. Remember that this is the time of year when stock and financial markets can become more volatile. The U.S. stock indexes are having their worst month since March.
The important outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower trading around $40.00. Gold prices today are sharply down, despite the keener uncertainty in the marketplace. Meantime, the yield on the U.S. Treasury 10-year note is trading around 0.67% today.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are solidly lower and hit a six-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. 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 3,300.00 and then at the overnight high of 3,326.25. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,247.25 and then at 3,225.00. Wyckoff’s Intra-day Market Rating: 3.5
December Nasdaq index futures: Prices are lower and hit a seven-week low in early U.S. trading. Bulls have the overall technical advantage but are fading fast. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 10,900.00 and then at 11,000.00. On the downside, shorter-term support is seen at the overnight low of 10,708.50 and then at 10,600.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on flight-to-quality buying. Bulls are working on a near-term price uptrend. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at last week’s high of 177 14/32 and then at 178 even. Shorter-term support lies at last week’s low of 175 28/32 and then at 175 16/32. Wyckoff’s Intra-Day Market Rating: 6.5
December U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at last week’s high of 139.24.0 and then at the September high of 139.29.0. Shorter-term technical support lies at last week’s low of 139.10.5 and then at 139.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are solidly down in early U.S. trading. Bulls have the overall near-term technical advantage but trading has turned sideways at higher levels and the uptrend has stalled out. 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 1.1850 and then at the overnight high of 1.1893. Shorter-term support is seen at the September low of 1.1759 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
October Nymex crude oil prices are lower 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $41.49 and then at $42.00. Look for sell stops just below technical support at $39.00 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are lower in early U.S. pre-market trading, on some profit taking from recent gains and amid the “risk-off” trading environment to start the week, including rising U.S.-China tensions. Bulls still have the near-term technical advantage in all three markets. On tap today is the weekly USDA crop progress reports and the weekly U.S. export inspections report.
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