Wednesday, October 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. stock indexes have made impressive recoveries from their October lows and are now in position to challenge the record highs scored in September. Mostly upbeat corporate earnings reports are presently trumping worries about inflation and slowing global economic growth.
In overnight news Bitcoin prices pushed above $64,000 and are near the record high, after a U.S. exchange traded fund on the crypto-currency debuted on Tuesday.
The Eurozone September consumer price index was reported up 0.5% from August and up 3.4%, year-on-year. Those numbers were right in line with market expectations.
The key outside markets today see the U.S. dollar index firmer. Crude oil prices are lower and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.65%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady and near this week’s six-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices are trending up again. 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 this week’s high of 4,517.50 and then at the record high of 4,539.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 4,471.75 and then at this week’s low of 4,436.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher and near this week’s four-week high in early U.S. trading. 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 to bullish early today. Shorter-term technical resistance is seen at 15,500.00 and then at 15,600.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Tuesday’s low of 15,269.00 and then at this week’s low of 15,038.75. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 158 16/32 and then at 159 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 17/32 and then at the October low of 157 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are a bit higher in early U.S. trading. 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 to bullish early today. Shorter-term resistance is seen at this week’s high of 130.31.0 and then at 131.06.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.08.0 and then at 130.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage. However, a six-week-old price downtrend on the daily bar chart has been negated, to suggest a market bottom is in place. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-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 this week’s high of 1.1681 and then at 1.1700. Buy stops likely reside just above those levels. Shorter-term support is seen at Tuesday’s low of 1.1620 and then at this week’s low of 1.1584. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading, on profit taking. Bulls still have the solid 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 bearish early today. Look for buy stops to reside just above technical resistance in December futures at the overnight high of $82.60 and then at this week’s high of $83.18. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were firmer overnight. Inflation worries and some global raw commodity supply shortages are likely luring speculative buying interest into the grain markets and that could continue to push prices higher. Corn and soybean bears still have the overall near-term technical advantage. Wheat bulls remain in firm technical command.
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