Wednesday, November 27–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, after setting more record and contract highs overnight. Trading in the U.S. Wednesday will really taper off as the session progresses, ahead of the U.S. Thanksgiving holiday on Thursday.
There is still little risk aversion in the marketplace at present, amid notions the U.S. and China are moving ever closer to a partial trade deal, and as there are no geopolitical flare-ups that are spooking traders and investors. The stock markets worldwide are also benefitting from a very low inflationary environment that makes investing in stocks about the only game in town.
In overnight news, China’s industrial profits fell by the most on record in October—down 9.9%, year-on-year. China’s producer price index was down 1.6% in October, which continues to point to worrisomely low global inflation.
The key “outside markets” today see the U.S. dollar index slightly up. Nymex crude oil prices are firmer and trading around $58.50 a barrel.
It’s a busy day for U.S. economic data Wednesday, as due out include the weekly MBA mortgage applications survey, the second estimate of third-quarter gross domestic product, personal income and outlays, the weekly DOE energy report, the Federal Reserve’s beige book, durable goods orders and the weekly jobless claims report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit new highs again overnight. Bulls have the solid 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 3,150.25 and then at 3,165.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 3,128.00 and then at this week’s low of 3,116.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are up in early U.S. trading and hit new highs overnight. Bulls have the solid near-term technical advantage. 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 bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 8,430.25 and then at 8,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 8,366.250 and then at this week’s low of 8,296.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the November high of 160 4/32 and then at 160 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Tuesday’s low of 159 1/32 and then at this week’s low of 158 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term support lies at Tuesday’s low of 129.13.5 and then at this week’s low of 129.10.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at this week’s high of 129.26.0 and then at 130.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer in early U.S. trading. Bulls have the 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 even with 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 97.880 and then at 98.000. Shorter-term support is seen at this week’s low of 97.680 and then at 97.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are slightly up in early U.S. trading. Bulls have the 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 bullish early today. Look for buy stops to reside just above technical resistance at the November high of $58.74 and then at $59.00. Look for sell stops just below technical support at the overnight low of $58.16 and then at this week’s low of $57.21. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures prices were firmer overnight, with corn up around 1 cent, soybeans up about 3 cents and wheat up 1 to 2 cents. Grain trader attitudes remain upbeat at mid-week, following reports this week that the U.S. and China are moving ever closer to a partial trade deal. It will likely be a quieter trading session in grain futures Wednesday, ahead of the US Thanksgiving holiday on Thursday. Weather in the US Corn Belt leans a bit bullish as two major winter storms and highs winds are bearing down on the region, slowing harvest of what little crops are left in the fields. Trader focus is turning to South American corn and soybean weather in corn and soybean regions. The near-term technical chart postures for corn and beans remains firmly bearish amid near-term price downtrends. However, the technicals in wheat have improved just recently.
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