Monday, September 24–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There is a bit more risk aversion in the world marketplace to start the trading week, as U.S.-China trade tensions are back on the front burner after China accused President Trump of being a trade bully and cancelled trade talks that had been set up for this week. And tariffs on $200 billion more in Chinese imports to the U.S. are set to kick in today. Stocks markets in China, Japan and South Korea were closed Monday for a holiday.
Focus this week will also be the Federal Reserve’s two-day Open Market Committee (FOMC) meeting that begins Tuesday. The FOMC is expected to slightly raise U.S. interest rates at this meeting. Fed Chairman Jerome Powell will also hold a press conference after the meeting.
The key outside markets today find the U.S. dollar index lower. Prices Friday hit a 2.5-month low. The greenback bears have downside technical momentum to suggest a market top is in place for the USDX. Meantime, November Nymex crude oil prices are solidly higher and hit a contract high today, and trading just above $72.00 a barrel.
U.S. economic data due for release today includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower on mild profit taking after hitting a contract and record high on Friday. The bulls have the firm 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,947.00 and then at 2,960.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,923.25 and then at 2,913.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index December futures: Prices are weaker in early U.S. trading, on profit taking. Bulls still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 7,550.00 and then at 7,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,500.00 and then at 7,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage as a four-week-old downtrend is in place on the daily chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 140 15/32 and then at 140 23/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 even and then at last week’s low of 139 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the firm overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 118.23.0 and then at 118.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 118.14.0 and then at 118.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is weaker and not far above last week’s 2.5-month low in early U.S. trading. The bulls are fading as a five-week-old downtrend is in place on the daily bar chart, to suggest a market top is in place. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 94.000 and then at 94.320. Shorter-term support is seen at last week’s low of 93.395 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are higher and hit a contract high in early U.S. trading. The bulls have the firm overall near-term technical advantage, but it’s at present price levels that rallies this year have petered out. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight contract high of $72.39 and then at $73.00. Look for sell stops just below technical support at the overnight low of $71.14 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
Grain futures prices were mixed to lower overnight. The U.S.-China trade war remains bearish for grains. Grain market bears still have the overall near-term technical advantage. Corn looks like it might be bottoming but bulls need to show more power early this week to better suggest such. Same goes for soybeans. U.S. corn and soybean harvest pressure is under way, so look for farmer selling pressure to limit the upside.
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