Tuesday, November 26–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly flat overnight and the U.S. stock indexes are also pointed toward near steady openings when the New York day session begins, after setting new record and contract highs overnight. Trading in the U.S. Tuesday will begin to taper off ahead of the U.S. Thanksgiving holiday on Thursday.
Global trader/investor risk appetite remains upbeat Tuesday, following reports that the top trade negotiators from the U.S. and China held a telephone conversation Monday, with the Chinese press reporting the two sides had “reached a consensus on properly resolving latest issues.”
Federal Reserve Chairman Jerome Powell gave a speech Monday evening, in which he said the Fed lowered interest rates this year because the U.S. economy was not performing as strongly as expected, but implied there will be no further rate cuts unless the economy showed unexpected weakness.
A report Tuesday said consumer demand for gold from its two largest consuming nations—China and India—is declining. The report said weaker local currencies have made gold more expensive for consumers to purchase, including increased duties from India’s government.
The key “outside markets” today see the U.S. dollar index near steady. Nymex crude oil prices are near steady and trading around $58.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, advance economic indicators, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, the consumer confidence index, and new residential sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading and hit new highs overnight. Bulls have the solid overall near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at the overnight contract high of 3,145.00 and then at 3,165.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 3,116.50 and then at 3,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are near steady in early U.S. trading and hit new highs overnight. Bulls 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 neutral early today. Shorter-term technical resistance is seen at the overnight contract high of 8,422.00 and then at 8,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 8,296.50 and then at 8,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the November high of 160 4/32 and then at 160 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 1/32 and then at Monday’s low of 158 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at Monday’s low of 129.10.0 and then at 129.05.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 129.23.5 and then at 129.28.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady in early U.S. trading. Bulls still have the 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. 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 the November high of 97.870 and then at 98.000. Shorter-term support is seen at 97.500 and then at 97.250. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly up in early U.S. trading. Bulls have the near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at last week’s high of $58.74 and then at $59.00. Look for sell stops just below technical support at Monday’s low of $57.21 and then at $57.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures prices were mixed to weaker overnight, with corn down around 1 cent, soybeans near steady and wheat down 3 to 5 cents. Grain trader attitudes are upbeat Tuesday, following reports that the top trade negotiators from the U.S. and China held a telephone conversation Monday, with the Chinese press reporting the two sides had “reached a consensus on properly resolving latest issues.” Monday’s weekly USDA crop progress report showed US corn harvest at 84% complete versus 85% expected and 76% complete last week. US soybean harvest was at 94% complete compared to 95% expected and 91% done last week. Weather in the US Corn Belt leans a bit bullish as storms, including snow, roll through the region this week, slowing harvest of what little crops are left in the fields. Trader focus is turning to South American corn and soybean weather in corn and soybean regions. The near-term technical chart postures for corn and beans remains bearish amid price downtrends. However, the technical in wheat have improved just recently.
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