Tuesday, December 3–Jim Wyckoff’s Morning Markets Report
Asian equities were mixed and European stock markets were mostly lower overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk appetite has again been dented Tuesday following President Trump’s remarks in London, regarding a partial U.S.-China trade deal. Trump said there is no timetable on even a partial deal and implied any deal could come after next year’s U.S. presidential election. “In some ways, it may be better to wait until after the election,” said Trump. Trump on Monday threatened Brazil and Argentina with trade tariffs and on Tuesday did the same to France.
In other overnight news, the Euro zone producer price index in October rose 0.1% from September and was down 1.9%, year-on-year. That’s yet another worrisomely low inflation report coming from the world’s third-largest economy.
For the gold and silver market bulls awaiting a geopolitical development to boost safe-haven demand for their metals, here is one possibility: Reports overnight said Iran is in its deepest economic slump in 30 years and is now facing a serious cash crunch and is in “economic peril.” Iran’s dire predicament could prompt the country’s leaders to lash out with its military against its enemies that include the U.S. Destabilizing the Persian Gulf region would be one way Iran could retaliate against crippling economic sanctions that have been in place from the U.S. and the West.
The key “outside markets” today see the U.S. dollar index near steady. Nymex crude oil prices are higher and trading around $56.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on profit taking after hitting a record high Monday. While bulls still have the overall near-term technical advantage, Monday’s price action produced a significantly bearish “key reversal” down on the daily bar chart, which is one technical clue that a near-term market top is in place. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,123.50 and then at 3,145.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 3,100.00 and then at 3,092.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading, on profit taking after last week’s record high. Bulls still have the solid 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. The 9-day average 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 8,358.00 and then at 8,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 8,291.00 and then at 8,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on short covering. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 Monday’s high of 158 28/32 and then at 159 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 157 6/32 and then at 157 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are solidly higher in early U.S. trading, on short covering. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at 129.00.0 and then at Monday’s low of 128.23.5. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 129.11.0 and then at 129.16.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The March U.S. dollar index is weaker and hit a two-week low in early U.S. trading. Bulls still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 97.500 and then at Monday’s high of 97.865. Shorter-term support is seen at the overnight low of 97.250 and then at 97.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are higher in early U.S. trading. Bulls have the slight near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below 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 Monday’s high of $56.67 and then at $57.00. Look for sell stops just below technical support at $55.50 and then at the November low of $54.85. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were higher overnight. Corn was up 1 1/2 cents, soybeans around 3 cents up and wheat 4 to 5 cents higher. Grain traders so far Tuesday are brushing off President Trump’s remarks in London regarding a partial U.S.-China trade deal. Trump said there is no timetable on even a partial deal and implied any deal could come after next year’s U.S. presidential election. “In some ways, it may be better to wait until after the election,” said Trump. Trump on Monday threatened Brazil and Argentina with trade tariffs and on Tuesday did the same to France. USDA’s weekly crop progress report Monday afternoon showed US corn harvest at 89% complete compared to 89% expected and 84% complete last week. US soybean harvest was 96% complete versus 97% expected and 94% done last week. Weather in the US Corn Belt has become a back-burner matter for grain traders, as the U.S. corn and soybean harvest is wrapping up. Focus is on South American weather in corn and soybean regions there, as well as weather in the major wheat-producing regions of the world.
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