Wednesday, October 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight. U.S. stock indexes are poised for weaker openings when the New York day session begins.
The markets appeared to take in stride another admonishment to the Federal Reserve from President Trump. Trump Tuesday afternoon said the Fed is acting too quickly on raising interest rates, given the low inflationary pressures at present.
In overnight news, the U.K.’s gross domestic product grew by 0.7% in the three months ending in July versus the previous three months.
The key U.S. data point of the day will be the producer price index report for September, which is expected to come in at up 0.2% from August.
The outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oil prices are near steady and trading just below $75.00 a barrel. Hurricane Michael in the U.S. Gulf of Mexico has shut in a good portion of U.S. oil production in the region.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, and monthly wholesale trade inventories.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Recent price action hints that at least a near-term market top is in place. 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 bearish early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 2,900.00 and then at 2,915.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,866.00 and then at 2,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are weaker in early U.S. trading. Recent price action begins to hint a near-term market top is in place. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 7,455.75 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 7,337.00 and then at 7,300.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower in early U.S. trading today. Bears have the solid overall near-term technical advantage as a six-week-old downtrend is in place on the daily chart. 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 technical resistance is seen at Tuesday’s high of 137 26/32 and then at 138 even. Buy stops likely reside just above those levels. Shorter-term support lies at 137 even and then at the contract low of 136 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. 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 lies at this week’s high of 117.27.5 and then at 118.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 117.13.5 and then at 117.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above 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 this week’s high of 95.840 and then at 96.000. Shorter-term support is seen at the overnight low of 95.230 and then at 95.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. The bulls have the firm overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 $75.28 and then at $76.00. Look for sell stops just below technical support at the overnight low of $74.48 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were steady to weaker overnight. Traders are awaiting Thursday’s monthly USDA supply and demand report. While market bottoms look to be in place for all three major grain markets, the upside is limited by big U.S. corn and soybean crops being harvested, the U.S.-China trade war and the surging U.S. dollar index.
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