Wednesday, November 15–Jim Wyckoff’s morning markets report
Asian and European markets were mixed to firmer in overnight trading. U.S. stock indexes are pointed to firmer openings when the New York day session begins, following strong gains posted Tuesday that pushed the indexes to multi-week highs.
Trader and investor attitudes are more upbeat at mid-week following Tuesday morning’s U.S. consumer price index report for October came in at up 3.2%, year-on-year. CPI was forecast at up 3.3%, year-on-year, versus a gain of 3.7% in the September report. The core CPI rate was up 4.0% in October, compared to the consensus forecast of up 4.1% and up 4.1% in the September CPI report. This data fell into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve halt its interest-rate-tightening cycle. U.S. Treasury yields dropped on the CPI data and the U.S. dollar index sold off sharply. The U.S. stock indexes rallied strongly on the CPI news.
The U.K. also got some better inflation news at mid-week. Consumer prices were 4.6% higher in October, year-on-year, following a rise of 6.7% in September. The October rise in CPI was the slowest in the U.K. in two years. Some analysts are now saying the better U.K. inflation data will end the Bank of England’s interest-rate-increase cycle.
In other overnight news, China got some slightly better-than-expected economic data when its industrial output for October was reported up 4.6%, year-on-year, versus expectations for a rise of 4.3%.
On tap today, U.S. President Joe Biden and Chinese leader Xi Jinping are set to meet during the Asia-Pacific Economic Cooperation summit in San Francisco. The White House wants a resumption of U.S./China military communications. Iran is also on the agenda, including the question of Iran’s nuclear program. A potential thawing of heretofore icy U.S.-China relations also has traders and investors with more upbeat attitudes this week.
U.S. lawmakers are once again scrambling to pass a measure to fund the federal government. This time the deadline is midnight Friday. This is “old hat” for the marketplace and markets are so far not reacting much to a potential U.S. government shutdown. U.S. congressional leaders are presently working on a plan to avert the shutdown.
The key outside markets today see the U.S. dollar index a bit firmer after careening to a nine-week low on Tuesday. Nymex crude oil prices are weaker and trading around $77.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.469%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index report, the weekly DOE liquid energy stocks report, the Empire State manufacturing survey, retail sales, and manufacturing and trade inventories.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer and hit a two-month high in early U.S. trading. 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 bullish early today. Today, shorter-term technical resistance comes in at 4,550.00 and then at 4,566.00. Support for active traders is seen at 4,500.00 and then at 4,450.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are up and hit a 3.5-month 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 16,000.00 and then at 16,100.00. On the downside, shorter-term support is seen at 15,800.00 and then at 15,650.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading, after hitting a six-week high overnight and posting strong gains Tuesday. 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 early today. Shorter-term technical resistance is seen at the overnight high of 115 24/32 and then at 116 even. Shorter-term support lies at 114 even and then at 113 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are lower in early U.S. trading. 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 this week’s high of 109.10.0 and then at 109.20.0. Shorter-term technical support is seen at 108.16.0 and then at 108.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
The March Euro currency futures are weaker in early U.S. trading following strong gains Tuesday that pushed prices to a 2.5-month high. Bulls now have the overall near-term technical advantage. Prices are trending higher on the daily bar chart. 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 1.0946 and then at 1.1000. Shorter-term support is seen at 1.0900 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly weaker in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $79.77 and then at $81.00. Look for sell stops just below technical support at this week’s low of $76.21 and then at the November low of $74.91. Wyckoff’s Intra-Day Market Rating: 4.5
Grain futures prices were firmer in overnight trading. Better risk appetite in the marketplace this week is encouraging the speculative grain market bulls to enter the markets on the long side. Technicals remain overall bearish for corn and wheat. Technicals are bullish for soybeans and meal.
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.