Tuesday, November 12–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly up overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Risk aversion in the world marketplace remains low.
There have been no new developments on the U.S.-China trade war front the past few days. However, President Trump on Tuesday will give a speech to the New York Economic Club that is likely to provide some fresh insight on Trump’s intentions on the matter. Trump last Friday sounded a bit less upbeat on the U.S.-China trade front, saying talks were going “very nicely” but adding the U.S. is not rolling back all of the import tariffs on Chinese products. Over the weekend Trump said China needs a trade deal completed way more than the U.S. needs it.
The civil unrest in Hong Kong has escalated in recent days. Some reports are saying the city is now on the verge of shutting down. One protester was shot by police over the weekend and another man was set on fire by protesters. This situation could flare up into a major geopolitical event very quickly if mainland China gets more involved in the matter.
In other overnight news, Federal Reserve Vice Chairman Richard Clarida said very low global inflation levels are presenting problems for the world’s major central banks, including their ability to stimulate economic growth.
The key “outside markets” today see the U.S. dollar index higher. Nymex crude oil prices are firmer and trading around $57.25 a barrel. A U.S. Energy Department official said U.S. shale oil production will reach 13 million barrels per day in December.
U.S. economic data due for release Tuesday includes the NFIB small business index, and the Goldman Sachs and Johnson Redbook retail sales reports.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly up in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 3,097.00 and then at 3,120.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 3,063.00 and then at 3,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls have the solid near-term 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 early today. Shorter-term technical resistance is seen at the contract high of 8,282.25 and then at 8,300.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 8,200.00 and then at last week’s low of 8,161.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls are trying to stabilize the down-trending market. Bears have the overall near-term technical advantage amid a five-week-old downtrend in place on the daily bar chart. 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 156 29/32 and then at last Friday’s high of 157 7/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 155 26/32 and then at 155 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are lower in early U.S. trading. Bulls have lost their chart advantage amid a five-week-old downtrend in place. 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 support lies at last week’s low of 127.31.5 and then at 127.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 128.17.5 and then at 128.22.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day. The 9-day is above with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 98.245 and then at 98.500. Shorter-term support is seen at Monday’s low of 97.970 and then at 97.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer in early U.S. trading. Prices are in a five-week-old uptrend on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 Monday’s high of $57.40 and then at last week’s high of $57.88. Look for sell stops just below technical support at last week’s low of $55.76 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures prices were steady to mostly firmer overnight, with corn up around 1/2 cent, soybeans up 1 to 2 cents and wheat steady to 3 cents higher. Some short covering from recent selling pressure is featured Tuesday morning. The grain market bulls are fading, technically, and have lost their near-term chart advantage as all three markets have seen their price uptrends negated, to suggest sideways-at-best price action into the end of the year. There have been no new developments on the US-China trade war front the past few days. However, President Trump on Tuesday will give a speech to the New York Economic Club that is likely to provide some fresh insight on Trump’s intentions on the matter. Trump last Friday sounded a bit less upbeat on the US-China trade front, saying talks were going “very nicely” but adding the US is not rolling back all of the import tariffs on Chinese products. Over the weekend Trump said China needs a trade deal completed way more than the US needs it. Limiting selling interest in grain futures early this week is the Midwest US weather, which is bitterly cold and snowy early this week. That will further delay harvesting of corn and soybeans and could cause quality problems for the crops still in the field. The USDA weekly crop progress report will be released today (delayed one day due to US government being closed for a holiday Monday). Traders are looking for US corn harvest at 65% complete compared to 52% complete last week. US soybean harvest is seen at 83% done versus 75% last week.
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