Monday, November 18–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were flat to firmer overnight. U.S. stock indexes are pointed toward modestly higher openings and new record highs when the New York day session begins. Trader and investor risk appetite is generally upbeat to start the trading week, amid no major geopolitical concerns at the moment.
The ongoing U.S.-China trade negotiations appear to be progressing a bit, as there has been no negative rhetoric coming from either side in recent days. However, there have been no reports of any significant breakthroughs on sticking points, either.
In overnight news, China’s central bank eased its monetary policy again Monday by lowering its reverse repurchasing rate for the first time since 2015. The trade war with the U.S. has hurt China’s economy and the central bank is working to keep it stimulated.
Hong Kong civil unrest remains elevated and the world marketplace continues to monitor the situation.
The key “outside markets” today see the U.S. dollar index slightly lower. Nymex crude oil prices are also weaker and trading around $57.50 a barrel.
U.S. economic data due for release Monday includes the NAHB housing index, and Treasury international capital data. The U.S. data point of the week will be the FOMC minutes reports release on Wednesday afternoon.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer and hit a new contract and record high in early U.S. trading. 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 3,127.75 and then at 3,150.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 3,100.00 and then at last week’s low of 3,075.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are firmer and hit a new contract and record high in early U.S. trading. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 8,367.00 and then at 8,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 8,306.50 and then at Friday’s low of 8,261.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are modestly weaker in early U.S. trading. Bulls have stabilized the market, but prices are still in a downtrend on the daily bar chart market. 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 early today. Shorter-term technical resistance is seen at last week’s high of 158 30/32 and then at 159 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 28/32 and then at 157 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Prices are in a six-week-old downtrend on the daily bar chart. 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 early today. Shorter-term support lies at the overnight low of 129.00.0 and then at 128.22.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 129.09.0 and then at last week’s high of 129.15.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower 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 below the 9-day. The 9-day is above with the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 98.000 and then at last week’s high of 98.300. Shorter-term support is seen at the overnight low of 97.740 and then at 97.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower in early U.S. trading, after hitting a six-week high overnight. Prices are 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 above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $58.09 and then at $59.00. Look for sell stops just below technical support at $57.00 and then at last week’s low of $56.20. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures prices were narrowly mixed overnight, with corn 1/4 cent higher, soybeans steady and wheat down 1/2 to 1 1/2 cents. The weekly USDA crop progress report out Monday afternoon is likely to show US corn harvest at 78% complete compared to 66% complete last week and 90% done last year. US Soybean harvest is seen at 90% done versus 85% complete last week and 91% last year. The ongoing U.S.-China trade negotiations appear to be progressing a bit, as there has been no negative rhetoric coming from either side in recent days. However, there have been no reports of any significant breakthroughs on sticking points, either. US Midwest weather leans a bit negative for the futures markets as drier and warmer weather is expected in the coming days, to allow producers to make good progress gathering their corn and soybean crops. The near-term technical chart postures for all three grain markets remains neutral for soybeans and bearish for corn and wheat.
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