Monday, November 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
There is some risk aversion in the marketplace to start the trading week, after a major shake-up occurred in Saudi Arabia’s ruling system over the weekend. Saudi princes and businessmen were arrested to weed out corruption, according to the Saudi Kingdom.
In other overnight news, the Euro zone September producer price index was reported up 0.6% from August and up 2.9%, year-on-year. Those numbers were a bit hotter than expected.
Weekend news reports said New York Federal Reserve President William Dudley will retire from his post early.
The key “outside markets” on Monday morning find the U.S. dollar index near steady. The greenback bulls have the slight overall near-term technical advantage. The U.S. currency has been boosted recently on the prospects of the U.S. government passing tax-cuts legislation that would give a boost to businesses and the economy.
Meantime, Nymex crude oil futures prices are firmer and hit a nine-month high overnight. Brent crude oil futures hit a two-year high Monday. The Saudi Arabia arrests of ruling members have also unsettled the oil market.
U.S. economic data due for release Monday is light and includes the employment trends index and the global services PMI.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading. Prices are close to last week’s contract and record high. Bulls have the solid overall near-term technical advantage and there are no strong, early technical clues that a market top is close at hand. 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 neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,585.50 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,562.25 and then at 2,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly lower in early U.S. trading after hitting a contract and record high overnight. Bulls have the solid technical advantage. 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 6,300.00 and then at 6,325.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 6,236.00 and then at last week’s low of 6,192.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher and hit a three-week high in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field, but the bulls have momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 technical resistance is seen at the October high of 154 5/32 and then at 154 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 12/32 and then at 153 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Bears have the overall near-term technical advantage but the bulls have momentum. The bullish weekly high close today is one clue that a market bottom is in place. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 lies at last week’s high of 125.13.0 and then at 125.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.03.5 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is near steady in early U.S. trading. A two-month-old uptrend is in place on the daily bar chart. The shorter-term moving averages for the dollar index are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the October high of 95.060 and then at 95.250. Shorter-term support is seen at 94.500 and then at 94.300. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer and hit a nine-month high in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a near-term price uptrend being in place. Look for buy stops to reside just above technical resistance at the overnight high of 56.28 and then at $57.00. Look for sell stops just below technical support at $55.50 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures markets were mixed to firmer overnight. Traders will closely examine this morning’s weekly USDA export sales report. Harvest in the U.S. Corn Belt is nearing completion. Focus has switched to world supply and demand fundamentals. Recent price action in the grains still hints at market bottoms in place.