Thursday, September 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer in overnight trading. The U.S. stock indexes are pointed to higher openings when the New York day session begins. Risk aversion has abated a bit late this week, following Tuesday’s big sell off in the U.S. stock indexes. The U.S. Senate will vote today on a bill extending government funding until Dec. 3 to avoid a shutdown when the fiscal year ends at midnight tonight. The bill is expected to pass.
In other overnight news, China’s official manufacturing purchasing managers index (PMI) declined to 49.6 in September from 50.1 in August. That’s the first time in 18-months that the manufacturing reading fell below 50.0. However, the services PMI number was 53.2 in September from 47.5 in August. A reading below 50.0 suggests contraction and a reading above 50.9 suggests growth in the sector. Separately, Reuters reported China’s big property giant Evergrande has indeed missed debt payments to offshore bond holders this month.
Thursday is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective.
The key outside markets today see the U.S. dollar index higher and hitting a 12-month high overnight. Nymex crude oil futures are near steady and trading around $74.75 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.527%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of second-quarter GDP, and the ISM Chicago business survey. Several Federal Reserve officials are slated to speak today, including Fed Chairman Powell, who with Treasury Secretary Yellen will speak to a House of Representatives committee.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,389.00 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,334.75 and then at 4,315.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 14,926.00 and then at 15,000.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the August low of 14,699.00 and then at 14,600.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: 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 technical resistance is seen at Wednesday’s high of 160 3/32 and then at 160 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 158 22/32 and then at 158 even. Sell stops likely reside just below those levels. 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance Wednesday’s high of 131.25.5 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.12.0 and then at this week’s low of 131.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are lower and hit a 14-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1625 and then at 1.1650. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1583 and then at 1.1550. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are a bit weaker in early U.S. trading. Bulls are still in solid technical control. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Wednesday’s high of $75.79 and then at this week’s high of $76.67. Look for sell stops just below technical support at this week’s low of $73.74 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were firmer overnight. The data points of the week for the grain markets are the quarterly USDA grain stocks and weekly exports sales reports on Thursday. Look for higher volatility after the data is released at noon EDT. The corn and soybean market bears still have the near-term technical advantage, while the wheat bulls have the slight 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