Thursday, November 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are headed for weaker openings when the New York day session begins. Still, trader and investor attitudes in the U.S. are mostly upbeat after a much-better-than-expected U.S. retail sales report for October that was released Wednesday morning. Read a Barron’s headline this morning: “The Fed may actually engineer a soft landing….”
In overnight news, the Euro zone reported its October consumer price index at up 10.6%, year-on-year, which was just slightly below expectations for a rise of 10.7%.
The London Metals Exchange has increased scrutiny of nickel trading as volatility has spiked. Broker SP Angel said Thursday morning in an email dispatch that nickel prices slid 12% Wednesday following a week of whipsawing volatility. “The LME nickel contract has seen its highest levels of volatility since the infamous nickel short squeeze in March.” The LME has hiked the nickel margin 28% to $6,100 per MT in a bid to limit intraday swings. Liquidity has increased dramatically on the Shanghai exchange following the March saga, with volatility on that contract far lower. “Traders have been put off by the LME’s decision to suspend trading during the fiasco, hitting buyers who were long at a time when prices hit $100,000 per MT.”
The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $84.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.736%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction and the Kansas City Fed business survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at 4,000.00 and then at this week’s high of 4,050.75. Support for active traders is seen at 3,900.00 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the slight overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,827.50 and then at 12,000.00. On the downside, shorter-term support is seen at 11,500.00 and then at 11,250.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading but did hit a six-week high overnight. 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 early today. Shorter-term technical resistance is seen at the overnight high of 126 27/32 and then at 128 even. Shorter-term support lies at 125 even and then at 124 even. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are lower 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 early today. Shorter-term resistance lies at this week’s high of 113.11.0 and then at 113.20.0. Shorter-term technical support lies at 112.16.0 and then at 112.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend 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 to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0429 and then at this week’s high of 1.0508. Shorter-term support is seen at this week’s low of 1.0297 and then at 1.0250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower and hit a three-week low in early U.S. trading. Bears have gained the near-term technical advantage. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $85.45 and then at Wednesday’s high of $87.51. Look for sell stops just below technical support at $83.00 and then at $81.30. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower in overnight trading. Reports say the Ukraine-Russia grain-shipping agreement has been extended. Corn bulls and bears are on a level overall near-term technical playing field. Soybeans bulls have the slight chart edge. Wheat bears have the near-term technical advantage. On tap today is the weekly USDA export sales 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