Monday, October 23–Jim Wyckoff’s morning markets report
Focus of traders and investors remains on rhetoric coming from central bankers, especially the Federal Reserve. A Wall Street Journal headline today reads: “The (U.S.) economy was supposed to slow by new. Instead it’s revving up.” A Barrons headline today says: “Markets are confident Fed done on rates. Why that’s dangerous.” The Barrons story suggests inflation is still not under control and geopolitical risk remains high–underscoring there are still major risks to the global economy.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are a bit weaker and trading around $87.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 5.012%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker and hit a five-month low in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,261.50 and then at 4,300.00. Support for active traders is seen at 4,200.00 and then at 4,175.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are lower and hit a five-month low in early U.S. trading. Shorter-term moving averages (4- 9-and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 14,716.00 and then at last Friday’s high of 14,877.50. On the downside, shorter-term support is seen at 14,500.00 and then at 14,400.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower and hit another contract low in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 108 5/32 and then at 109 even. Shorter-term support lies at the overnight contract low of 107 4/32 and then at 106 even. Wyckoff’s Intra-Day Market Rating: 3.5
December U.S. T-Notes: Prices are lower in early U.S. trading. 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 bearish early today. Shorter-term resistance lies at 106.00.0 and then at Friday’s high of 106.06.0. Shorter-term technical support is seen at the contract low of 105.10.5 and then at 105.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears are in overall near-term technical control. However, a price downtrend on the daily bar chart has been negated. The shorter-term moving averages for the Euro 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 Euro are bullish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0641 and then at the October high of 1.0668. Shorter-term support is seen at 1.0523 and then at the October low of 1.0482. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at $86.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were weaker in overnight trading. Still-keen risk aversion in the marketplace early this week has most the grain market bulls skittish. Technicals are overall bearish for corn, wheat and soybeans. However, the meal market is on fire, to suggest soybeans will also see some more upside price action in the near term. On tap today is the weekly USDA export inspections report.
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