Wednesday, October 9–Jim Wyckoff’s Morning Markets Report
Asian stocks were mostly weaker overnight, while European shares were mostly up. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Risk appetite has up-ticked a bit at mid-week, on reports China says it is still open to a trade deal despite the latest U.S. sanctions imposed on that nation this week. Trade negotiations between the world’s two largest economies are taking place in Washington, D.C. this week. Many market watchers are still very skeptical the two nations can reach a trade agreement anytime soon.
The U.S. data point of the day is the Federal Reserve’s FOMC minutes that are due out at 2:00 p.m. eastern time. Federal Reserve Chairman Jerome Powell on Tuesday said in a speech the Fed will be purchasing more securities in an effort to keep short-term lending markets more liquid. The market place deemed his speech Tuesday as leaning toward the dovish side of U.S. monetary policy. Powell gives another speech today.
Nymex crude oil prices are firmer and trading around $53.00 a barrel today. Reports said Saudi Arabia’s oil capacity will be back to normal by November, or before, following the early-September missile attack on a major Sauid oil installation. The other key “outside market” sees the U.S. dollar index slightly down in early U.S. trading.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Trading has turned choppy recently. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,934.25 and then at Tuesday’s high of 2,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,888.25 and then at 2,870.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 7,799.75 and then at 7,841.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,604.50 and then at 7,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 164 24/32 and then at this week’s high of 165 7/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 163 18/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term support lies at this week’s low of 131.06.5 and then at 131.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 131.26.0 and then at last week’s high of 132.01.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly down in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 98.955 and then at the contract high of 99.305. Shorter-term support is seen at Tuesday’s low of 98.540 and then at last week’s low of 98.300. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are firmer in early U.S. trading, on short covering. Prices are still in a steep near-term downtrend. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $53.33 and then at this week’s high of $54.06. Look for sell stops just below technical support at the overnight low of $52.31 and then at $52.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures prices were mixed again in overnight trading. Corn was down around 3/4 cent, soybeans up 6 to 7 cents and wheat around 1 to 2 cents lower. Soybeans were boosted on reports China says it is still open to a trade deal despite the latest U.S. sanctions imposed on that nation this week. Trade negotiations between the world’s two largest economies are taking place in Washington, D.C. this week. Many market watchers are still very skeptical the two nations can reach a trade agreement anytime soon. Grain traders are awaiting two big events later this week: the USDA monthly supply and demand report out Thursday morning and a big snow storm and cold taking aim at the US northern Midwest and Plains states. On the USDA report, there is no solid consensus regarding what the agency will do regarding the size of the US corn and soybean crops, especially after USDA last week made surprising cuts to US corn and soybean stockpiles. The major snowstorm and cold weather forecast to hit the northern plains and northern Corn Belt late Thursday and into Saturday will end the growing season for crops in those regions. Corn and soybean harvest is already behind due to recent wet weather and the late planting in the springtime. This is a bullish element for the grains that could become more significantly bullish in the coming several days.
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