Thursday, November 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. U.S. stock indexes are headed for modestly higher openings when the New York day session begins. Traders are anxiously awaiting the U.S. consumer price index report for October, due out at 8:30 a.m. EST this morning. The CPI is expected to come in up 7.9%, year-on-year, compared to the 8.2% rise seen in the September report. This report may be the most important data point of the month. A miss either to the upside or downside in the CPI print is likely to see higher markets volatility and may influence the Federal Reserve’s decision-making process ahead of its December FOMC meeting.
The crypto currency markets remain in turmoil late this week, with fears of a contagion effect and more illiquidity in the cryptos. Broker SP Angel this morning reports in an email dispatch: A proposed takeover of likely insolvent FTX crypto exchange by rival Binance is set to fail, sending Bitcoin down 26% this week and triggering concerns of wider market contagion. FTX exchange, whose founder Sam Bankman-Fried (likened to John Pierpont Morgan during the banking crisis of 1907), is looking for support for a reported $8 billion debt shortfall. The exchange’s insolvency has triggered a further step down in crypto market values, with the total crypto market cap standing at $914 billion, down from over $3 trillion in November 2021. JP Morgan are reporting crypto market participants are facing a ‘cascade’ of margin calls, although it is unclear whether this will feed into wider equity markets.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $85.00 a barrel. Oil prices have slipped this week on worries of slowing demand from China, due to rising Covid cases there. The 10-year U.S. Treasury note is yielding 4.102%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is even with 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 3,800.00 and then at this week’s high of 3,867.00. Support for active traders is seen at this week’s low of 3,738.25 and then at last week’s low of 3,704.25. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 11,000.00 and then at this week’s high of 11,231.25. On the downside, shorter-term support is seen at this week’s low of 10,751.00 and then at the November low of 10,636.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid overall technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 121 even and then at 122 even. Shorter-term support lies at 119 even and then at this week’s low of 118 3/32. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading. Prices are in a three-month-old downtrend on the daily bar chart. Bears have the solid overall 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 resistance lies at 111.00.0 and then at 111.16.0. Shorter-term technical support lies at Wednesday’s low of 110.00.0 and then at 109.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. Bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. 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 overnight high of 1.0070 and then at the October high of 1.0131. Shorter-term support is seen at this week’s low of .9948 and then at .9900. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower and hit a two-week low in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at $87.00 and then at $89.00. Look for sell stops just below technical support at $84.00 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were narrowly mixed in quieter overnight trading. Corn bulls have the slight overall near-term technical advantage but are fading. Soybeans bulls also have the slight chart edge. Wheat bears have the near-term technical advantage. Traders are looking ahead to this morning’s 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