Tuesday, November 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. There remains little risk aversion in the global marketplace at present. Recent positive news on the Covid-19 front—falling infection rates in the U.S. and new, powerful drugs to combat the virus—have contributed to the upbeat marketplace attitudes and are also helping to lift equities markets. For now, traders and investors are pushing aside the growing prospects for rising and even problematic price inflation. Speaking of inflation, the U.S. data point of the day is the producer price index report for October, which is seen coming in at up 0.6% from September. The September report showed a rise of 0.5%. A hotter PPI reading is likely to impact several markets, including bonds, gold, currency markets and the U.S. stock market.
In overnight news, Bitcoin prices rose to another record high near $68,000.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback after prices last week hit a new high for the year. Nymex crude oil prices are higher and trading around $82.35 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.482%.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain stores sales indexes, and the NFIB small business index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and not far below last Friday’s record high. 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 early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,711.25 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last Friday’s low of 4,667.50 and then at 4,650.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are a bit firmer in early U.S. trading. Prices last Friday hit a record high. 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 contract and record high of 16,448.50 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 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: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are 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 the overnight high of 163 4/32 and then at 163 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 9/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are 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 resistance is seen at Monday’s high of 131.25.5 and then at last week’s high of 131.30.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.15.0 and then at this week’s low of 131.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are slightly higher 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 neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.1625 and then at 1.1650. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1558 and then at last week’s low of 1.1520. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are a bit higher in early U.S. trading. Bulls have the near-term technical advantage but have become wobbly recently. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the $83.42 and then at $84.00. Look for sell stops just below technical support at Monday’s low of $81.05 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were firmer overnight on position evening ahead of Tuesday’s monthly USDA supply and demand report. That report is expected to favor the bearish camp—especially in soybeans. Look for more active trading following the 11:00 a.m. CST release. Corn and wheat bulls have the near-term technical advantage, while soybean bears have the technical advantage.
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