Friday, November 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. It appears traders and investors are caught between a surge in Covid-19 infections and the hopes for a vaccine. Positive vaccine news continues to be reported, with some of the general public possibly starting to get inoculated as soon as next month. Yet, Covid cases in the U.S. and Europe are raging and new infections are setting record highs by the day. More and more U.S. and European businesses are being restricted as local and state governments work to slow down the pandemic’s spread.
Hopes for a U.S. financial aid package American workers dimmed further on Thursday when U.S. Treasury Secretary Mnuchin declined to extend U.S. emergency loan programs and requested the Federal Reserve return to the Treasury yet-unused funds used in those programs, which are set to expire at the end of the year. The Fed declined, saying those programs are still working to stabilize the U.S. economy. This move appears to be in concert with other ongoing Trump administration efforts to not recognize the incoming president, Joe Biden, or at the very least make his transition into office as rocky as possible.
In other news reports said investors pulled $4 billion from gold-backed exchange traded funds last week, which is the largest-ever weekly outflow, according to Bank of America.
The U.S. dollar index is slightly higher early today. The other important outside market sees January Nymex crude oil futures prices firmer and trading around $42.30 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.84%.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have the solid overall near-term technical advantage and prices are not far below the recent spike high. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with 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 3,600.00 and then at this week’s high of 3,637.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 3,542.25 and then at 3,525.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls have the firm overall near-term technical advantage, but stiff resistance layers lie just above the market. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 12,096.25 and then at the October high of 12,249.00. On the downside, shorter-term support is seen at the overnight low of 11,923.50 and then at 11,800.00. 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. Bears have the firm near-term 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 174 9/32 and then at 175 even. Shorter-term support lies at 173 even and then at 172 24/32. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the firm near-term 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 resistance lies at the overnight high of 138.28.0 and then at 138.24.5. Shorter-term technical support lies at Thursday’s low of 138.07 and then at 138.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are slightly lower in early U.S. trading. 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 neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1925 and then at the November high of 1.1954. Shorter-term support is seen at this week’s low of 1.1849 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages 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 (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 $42.68 and then at the November high of $43.33. Look for sell stops just below technical support at the overnight low of $41.61 and then at this week’s low of $40.40. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are higher to solidly higher in early U.S. pre-market trading. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place in all three markets. There are no strong, early clues to suggest that market tops are close at hand.
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