Wednesday, November 28–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European stock markets were also mostly higher overnight. Asian stock indexes were also mostly firmer. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock index bulls are having a good week, so far, but the losses the past several weeks still suggest major market tops are in place.
Focus this week is on the upcoming Group of 20 meetings that begin Friday in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war. President Trump made hardline comments on the matter Monday, but his chief economic advisor on Tuesday sent mixed signals on any hopes for an agreement this weekend. There is general agreement that the trade war is hurting China’s economy much more than the U.S. economy.
On tap today is a speech by Federal Reserve Board governor Jerome Powell to the Economic Club of New York. Traders will be watching to see if Powell gives any clues on the timing and direction of the Fed’s monetary policy moves.
The key outside markets today find Nymex crude oil futures prices slightly lower. Prices Monday hit a 13-month low of $50.10. Crude prices are down around 30% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week.
The other key outside market today finds the U.S. dollar index trading near steady but not far below this month’s 1.5-year high.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report, the second estimate of third-quarter GDP, new residential sales, the Richmond Fed business survey, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bears still have the overall near-term technical advantage. The 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 moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,725.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,675.00 and then at Tuesday’s low of 2,660.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are firmer in early U.S. trading today. Shorter-term moving averages (4- 9-and 18-day) are still 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 to bullish early today. Shorter-term technical resistance is seen at 6,800.00 and then at 6,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,738.50 and then at 6,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 139 18/32 and then at last week’s high of 139 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 139 even and then at 138 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are near steady in early U.S. trading today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 119.06.0 and then at last week’s high of 119.09.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 118.29.5 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady in early U.S. trading. Bulls have the solid 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 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 November high of 96.930 and then at 97.500. Shorter-term support is seen at the Tuesday’s low of 96.330 and then at this week’s low of 96.040. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
January Nymex crude oil prices are near steady after hitting a 13-month low of $50.10 Monday. Bears are in solid near-term technical control. There are no early clues that a market bottom is close at hand. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $52.56 and then at $53.00. Look for sell stops just below technical support at $51.00 and then at $50.10. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices are set to open firmer today, on short covering and some bargain hunting. Not much new. The grain market bears still have the overall near-term technical advantage.
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