Friday, October 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are set to open the New York day session higher, on follow-through strength from Wednesday’s and Thursday’s gains. Stock index bulls are having a very good week. China’s main stock markets reopened Friday after an eight-day holiday.
U.S. congressional discussions on a stimulus package for American citizens and businesses are reportedly seeing late-week progress as President Trump has apparently agreed to a larger stimulus package that the Democrats have been seeking. There are still likely hoops to jump through for U.S. lawmakers and most market watchers still any Covid-19 relief checks could be in the mail before the early-November election.
In other overnight news, China’s Caixin services purchasing managers index (PMI) for September rose for a fifth straight month, coming in at 54.8 versus 54.0 in July, and beat expectations for a reading of 54.3.
Gold prices are sharply up Friday morning, partly on the reopening of China’s markets following a long holiday and the upbeat Chinese economic data that will likely prompt better consumer demand for the precious metal.
The important outside markets early today see the U.S. dollar index lower. Nymex crude oil prices are weaker and trading around $40.85 a barrel. The oil market bulls have had a good week, as a major hurricane in the Gulf of Mexico has shut in oil installations. The 10-year U.S. Treasury note yield is presently trading around 0.77%.
U.S. economic data due for release Friday is light and includes monthly wholesale trade.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit a five-week high in early U.S. trading. 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 bullish early today. Today, shorter-term technical resistance comes in at 3,475.00 and then at 3,500.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Thursday’s low of 3,405.50 and then at 3,375.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer 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 the October high of 11,604.75 and then at 11,700.00. On the downside, shorter-term support is seen at Thursday’s low of 11,469.75 and then at 11,400.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading on short covering after hitting a four-month low Wednesday. 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 174 16/32 and then at 175 even. Shorter-term support lies at the overnight low of 173 22/32 and then at this 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, on short covering after hitting a five-week low Wednesday. 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 resistance lies at 139.00.0 and then at Wednesday’s high of 139.04.5. Shorter-term technical support lies at the overnight low of 138.24.5 and then at this 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 higher 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 this week’s high of 1.1825 and then at 1.1850. Shorter-term support is seen at the overnight low of 1.1773 and then at this week’s low of 1.1725. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $41.47 and then at $41.72. Look for sell stops just below technical support at Thursday’s low of $39.76 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are solidly higher in early U.S. pre-market trading. Grain market bulls are on a run and remain in solid technical control amid accelerating price uptrends in place. On tap today is the monthly USDA supply and demand report, which is expected to be neutral to friendly. Speculators are becoming more interested in grain futures on the long side, as technical have become much more bullish this week. Focus is on U.S. harvest results, which are coming in varied but mostly good.
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