Monday, September 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. U.S. stock indexes are near their record highs scored recently.
Gold prices are lower in pre-U.S.-day-session trading. Less risk aversion in the marketplace the past week has dented the safe-haven metal market bulls.
The markets’ highlight of the week is the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. No interest rate changes are expected from the FOMC at this meeting. However, it is expected the Fed will announce it is drawing down its balance sheet of securities.
In overnight news, the Euro zone consumer price index for August came in at up 0.3% from July and up 1.5%, year-on-year. The August report was right in line with market expectations.
The European Central Bank said Monday it expects Euro zone inflation to drop to a level of 0.9% in early 2018. However, the ECB said the expected temporary drop will only be a statistical quirk.
President Trump speaks in front of the United Nations in New York Tuesday. It’s expected that Trump will talk about North Korea’s missile program.
The key outside markets on Monday morning see the U.S. dollar index slightly higher. Meantime, Nymex crude oil futures are trading slightly lower this morning.
U.S. economic data due for release Monday is light and includes the NAHB housing market index and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are firmer and hit another contract and record high overnight. 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 with 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 contract high of 2,504.50 and then at 2,515.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,487.00 and then at 2,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are firmer in early U.S. trading today. Prices are not far below this month’s record high. 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 last week’s high of 6,015.75 and then at the contract high of 6,025.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,996.50 and then at 5,975.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 155 1/32 and then at 155 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 154 12/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage, but have faded badly recently and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 126.12.0 and then at Friday’s high of 126.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 126.05.5 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bears 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 above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 91.940 and then at last week’s high of 92.420. Shorter-term support is seen at last week’s low of 91.360 and then at 91.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the August high of $50.51 and then at $52.00. Look for sell stops just below technical support at $49.00 and then at $48.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were mixed overnight. Traders will closely examine this morning’s weekly USDA export inspections report. Grain market bulls have shown impressive resilience recently, to further suggest harvest lows are in place and that prices can work at least sideways, if not sideways to higher, into the end of the year.