Tuesday, October 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session mixed. Featured in the stock markets this week will be third-quarter earnings reports from major companies.
Many major industrialized countries, including the U.S., just can’t tamp down the Covid-19 infection spread. Johnson and Johnson has now paused its Covid vaccine trials, in what was hoped to be a promising vaccine.
In overnight news, China’s imports in September were up 13.2% after falling 2.1% in August. Exports were up 9.9% in September. Both imports and exports beat market expectations and underscore how China’s forced and nearly complete lockdowns for its Covid-19 hotspots have put that country’s economy back on track much sooner than most of the free world’s economies.
Following the U.S. government holiday on Monday, the marketplace gets its first data point of the week Tuesday, with the consumer price index in focus. CPI for September is seen at up 0.2% from August, versus up 0.4% the month prior. The U.S. CPI is seen up 1.4%, year-on-year versus up 1.3% in August. These numbers are certainly not problematic on the inflation front.
The important outside markets early today see the U.S. dollar index firmer. Nymex crude oil prices are higher and trading around $40.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is 0.75% today.
Other U.S. economic data due for release Tuesday includes the NFIB small business index, the IMF world economic outlook, real earnings, and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading after hitting a six-week high Monday. Bulls have the solid overall near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,541.00 and then at the September high of 3,576.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 3,500.00 and then at Monday’s low of 3,464.25. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are solidly higher and hit a six-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at 12,300.00 and then at 12,400.00. On the downside, shorter-term support is seen at the overnight low of 12,023.00 and then at 11,900.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are modestly higher in early U.S. trading on more short covering after hitting a four-month low last week. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 174 25/32 and then at 175 even. Shorter-term support lies at Monday’s low of 174 even and then at last week’s low of 173 10/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading. 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 early today. Shorter-term resistance lies at the overnight high of 139.01.5 and then at 139.04.5. Shorter-term technical support lies at Monday’s low of 138.25.5 and then at last week’s low of 138.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are weaker 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 to bearish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.1847 and then at 1.1900. Shorter-term support is seen at 1.1773 and then at last week’s low of 1.1725. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-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 Monday’s high of $40.45 and then at last week’s high of $41.47. Look for sell stops just below technical support at Monday’s low of $39.04 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are firmer in early U.S. pre-market trading, following Monday’s what are so far just normal corrective price pullbacks in solid uptrends. Grain market bulls remain in solid technical control. This is normally a time of year when U.S. harvest pressure caps price gains. Such could limit the upside in the near term. Remember that a bull market needs to be fed fresh, positive fundamental news very often, and the recent surge in demand for U.S. grains could be factored into prices now.
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