Monday, November 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins. There were news reports the past few days that a Covid-19 vaccine will be on the market, to some degree, by the end of this year, which is much sooner than most expected. However, somewhat denting trader and investor enthusiasm on this last trading day of the month are reports the out-going Trump administration will further sanction major Chinese companies in the coming weeks.
Copper prices in Shanghai hit a more-than-eight-year high Monday, while prices in London are at a more-than-four-year high. China’s strong economic recovery continues, with the latest data showing its November manufacturing purchasing managers index (PMI) at 52.1 versus 51.4 in October, and 51.5 expected. The non-manufacturing PMI came in at 56.4 in November compared to 56.2 last month and 56.0 expected. The official manufacturing PMI reading was the highest since September 2017, while the mon-manufacturing PMI was the highest reading since June of 2012. There is speculation a Chinese copper producer which may have sold copper forwards at lower price levels and is now caught in a “short squeeze” situation.
The U.S. dollar index is lower and hit a 2.5-year low early today. The other important outside market sees January Nymex crude oil futures prices weaker and trading around $44.75 a barrel. There is an OPEC meeting that begins Monday and will be closely watched by the marketplace. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.
U.S. economic data due for release Monday includes the Chicago ISM business survey, pending home sales, and the Texas manufacturing survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls have the solid overall near-term technical advantage and prices are just below the recent high set earlier this month. The 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 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 3,645.75 and then at the contract high of 3,657.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,596.50 and then at 3,570.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are slightly down in early U.S. trading. Bulls have the solid overall near-term technical advantage, but stiff resistance lies 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,327.50 and then at the October high of 12,420.75. On the downside, shorter-term support is seen at the overnight low of 12,200.00 and then at Friday’s low of 12,131.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above 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 175 10/32 and then at last week’s high of 175 21/32. Shorter-term support lies at 174 16/32 and then at 174 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 138.08.0 and then at 138.12.0. Shorter-term technical support lies at Friday’s low of 137.28.0 and then at last week’s low of 137.23.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March Euro currency futures are higher and hit a three-month high 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 bullish early today. The Euro currency finds shorter-term technical resistance at September high of 1.2045 and then at 1.2100. Shorter-term support is seen at the overnight low of 1.1995 and then at 1.1950. Wyckoff’s Intra Day Market Rating: 7.0
NYMEX CRUDE OIL
January Nymex crude oil prices are lower on more profit taking after hitting an eight-month high last week. Bulls still have the solid 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $46.42 and then at last week’s high of $46.26. Look for sell stops just below technical support at the overnight low of $44.42 and then at $44.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mixed to weaker in early U.S. pre-market trading. The grain market bulls still have the firm overall near-term technical advantage. Weekly USDA export inspections data will be out this morning.
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