Wednesday, September 25–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly down in overnight trading. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins.
Traders and investor risk sentiment has up-ticked at mid-week, mainly because of two developments on Tuesday. The first is the harsh rhetoric coming from President Trump in a speech to the United Nations assembly in New York Tuesday morning. Trump slammed China for its unfair trade practices and said the world is no longer embracing “globalization.” Trump said “nationalism” is the new bent among the major countries of the world. Trump’s strong words against China seemingly can’t help but decrease the odds of a substantial U.S.-China trade agreement anytime soon.
The second development Tuesday was that the U.S. House of Representatives is now considering impeaching Trump over what the House says are improper and illegal comments Trump made to a Ukrainian official. Trump responded that he will release the transcript of his comments to the official. Whether Trump actually gets impeached seems unlikely, at this time. However, the inquiry by the House is likely to bog down the U.S. government and could hamstring Trump’s foreign policy agenda, including trade negotiations with China.
Brexit news is near the front burner again after the U.K. Supreme Court ruled that Prime Minister Boris Johnson acted illegally when he suspended Parliament.
Nymex crude oil prices are lower and trading around $56.50 a barrel. The other key outside market today sees the U.S. dollar index trading higher.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly down and hit a three-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are now fading a bit. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,979.00 and then at 3,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,950.00 and then at 2,935.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are weaker and hit a three-week low in early U.S. trading. Bulls still have the overall technical advantage but are now fading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 7,759.25 and then at 7,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,683.25 and then at 7,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly firmer and hit a two-week high in early U.S. trading. Bulls have upside momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 163 10/32 and then at 164 even. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at 161 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term support lies at the overnight low of 130.14.5 and then at 130.08.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at this week’s high of 130.25.0 and then at 131.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 98.455 and then at 98.670. Shorter-term support is seen at the overnight low of 97.965 and then at this week’s low of 97.880. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Bulls still have the slight overall near-term technical advantage but are fading. Prices are still in a six-week-old uptrend on the daily bar chart. 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 the overnight high of $57.02 and then at $58.00. Look for sell stops just below technical support at $56.00 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were steady to weaker in overnight trading. Corn was near steady, soybeans down around 2 cents and wheat about 3 cents down. Some keener risk aversion in the world marketplace at mid-week is a bearish weight on the grain markets. Focus of grain traders is still on any fresh purchases of US grains by China, as seen in the daily or weekly export sales reports from USDA. Recent price action and the technical charts still suggest “harvest lows” are in place for grain futures prices. Weather in the US Corn Belt has been too wet in many areas and too dry in a few areas, which is prompting some concerns about crop quality as harvest begins. The northern U.S. plains and the Canadian prairies have also been too wet for ideal crop conditions.
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