Monday, October 31–Jim Wyckoff’s Morning Markets Report
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $86.50 a barrel. The 10-year U.S. Treasury note is yielding 4.062%.
In overnight news, Euro zone inflation continues to run hot. The October consumer price index came in at up 10.7%, year-on-year, after a rise of 9.9% in September. The CPI was forecast at up 10% for October.
Russia over the weekend said it will suspend its agreement with Ukraine and the United Nations to allow Ukrainian grain to be exported from the war-torn country. Grain futures rallied on the news.
Traders are looking ahead to the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. Traders and investors also want to see what comments the FOMC and Powell make regarding the future path of U.S. monetary policy—specifically, when the Fed will back off the accelerator on aggressively raising interest rates.
U.S. economic data due for release Monday includes the ISM Chicago business survey and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a five-week high last Friday and closing at a bullish weekly high close. A fledgling price uptrend is in place on the daily bar chart to suggest a market bottom is in place. 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 to bearish early today. Today, shorter-term technical resistance comes in at last week’s high of 3,924.25 and then at 3,950.00. Support for active traders is seen at 3,850.00 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are weaker in early U.S. trading. Bears still have the overall near-term technical advantage. However, prices Friday scored a weekly high close. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 11,500.00 and then at the October high of 11,734.00 and then at 12,000.00. On the downside, shorter-term support is seen at 11,250.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 121 8/32 and then at 122 even. Shorter-term support lies at 120 even and then at 119 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid technical advantage. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 110.30.5 and then at 111.16.0. Shorter-term technical support lies at 110.10.0 and then at 110.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily chart. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.0034 and then at 1.0100. Shorter-term support is seen at the overnight low of .9950 and then at .9900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December 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 and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $88.65 and then at $90.00. Look for sell stops just below technical support at $85.00 and then at $84.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were higher in overnight trading, with wheat and corn sharply up on news Russia suspended the Ukraine grain-shipping deal with the U.N. and Ukraine. Corn bulls have the overall near-term technical advantage. Soybeans are in a neutral technical posture at present. Wheat bulls and bears are back on a level overall near-term technical playing field. On tap today is the weekly USDA 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