Friday, November 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. The U.S. indexes hit record highs again overnight. Traders and investors are generally in upbeat moods at present, as U.S. corporate earnings reports have been very positive. Risk appetite got another boost Friday morning when Pfizer reported its Covid-19 pill as 89% effective in reducing hospitalization and death.
Traders are awaiting Friday morning’s important U.S. employment situation report for October. The key non-farm payrolls component of that report is expected to show a rise of 450,000 compared to a gain of 194,000 in the September report. The U.S. unemployment rate is seen at 4.7% versus 4.8% in the September report. The average hourly earnings component will be closely watched for inflation clues, and it’s seen up 4.9%, year-on-year, compared to up 4.58% in the September report.
The key outside markets today see the U.S. dollar index higher and near the high for the year. Nymex crude oil prices are higher and trading around $79.65 a barrel. The oil market bulls have become wobbly this week. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.532%.
Other U.S. economic data due for release Friday includes consumer credit.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. 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 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 contract and record high of 4,686.00 and then at 4,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Thursday’s low of 4,650.75 and then at 4,613.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are up in early U.S. trading and hit another record high overnight. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight record high of 16,423.75 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 16,129.50 and then at and then at 16,000.00. Sell stops likely reside 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 slightly higher 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 161 16/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 22/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are a bit 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 early today. Shorter-term resistance is seen at this week’s high of 131.14.0 and then at 131.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.00.0 and then at 130.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.1600 and then at this week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1535 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading, after Thursday’s sell off. Bulls still have the near-term technical advantage but have become wobbly this week. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is even with 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 the overnight high of $80.17 and then at $81.00. Look for sell stops just below technical support at this week’s low of $78.25 and then at $77.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to firmer overnight. Not much new this week. Corn and wheat bulls still have the technical advantage. Soybean bears are in command. Next week’s (Tuesday) monthly USDA supply and demand report is coming into focus. That report is expected to favor the bearish camp—especially in soybeans.
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