Wednesday, September 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. There continues to be little to sometimes only modest risk aversion in the world marketplace at present.
Amid a lack of other fresh fundamental news so far this week, focus remains on the trade war between the U.S. and China. The U.S. hit China with more tariffs this week and China vowed to retaliate. Many traders and investors took note Tuesday of a comment by Alibaba founder Jack Ma, who said the trade dispute between the world’s two largest economies could take decades to resolve. Ma implied that the Chinese culture won’t allow that nation to “give in.” But Americans reckon President Trump won’t either. The U.S.-China trade war and the recent strength of the U.S. dollar have hit emerging markets and their currencies hard the past few months.
The key outside markets today find the U.S. dollar index weaker and Nymex crude oil prices slightly down and trading just below $70.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The bulls have the firm overall near-term technical advantage but prices have been trading sideways at higher levels for two weeks. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with 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 2,921.75 and then at 2,935.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,883.50 and then at 2,869.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage, but have faded a bit recently. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 7,575.00 and then at 7,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,500.00 and then at 7,450.00. 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 lower and hit a 4.5-month low in early U.S. trading. Bears have the firm overall near-term technical advantage as a downtrend is in place on the daily chart. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 140 21/32 and then at 141 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 7/32 and then at 140 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower and hit a 4.5-month low in early U.S. trading. Bears have the firm overall near-term technical advantage. Prices are in a downtrend 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 118.25.5 and then 119.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.20.0 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower in early U.S. trading. The bulls still have the overall near-term technical advantage but are fading. Prices have been trending lower for five weeks. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.280 and then at this week’s high of 94.565. Shorter-term support is seen at this week’s low of 93.880 and then at 93.500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are near steady in early U.S. trading. The bulls have the overall near-term technical advantage. However, very stiff technical resistance still lies just above the market. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $70.42 and then at $71.00. Look for sell stops just below technical support at $69.00 and then at this week’s low of $68.53. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were firmer overnight on short covering from recent strong selling pressure. Grain market bears still have the overall near-term technical advantage and new lows are still likely in corn and soybeans. U.S. corn and soybean harvest pressure is going full speed starting this week, so look for sideways-at-best trading in the grains in the coming weeks, but more likely sideways-to-lower.
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