Tuesday, October 3–Jim Wyckoff’s morning markets report
The marketplace is still digesting the “higher for longer” U.S. interest rate scenario. The benchmark 10-year Treasury note yield is at its highest level since 2007. A Barron’s headline today reads: “The bond sell off is gathering pace. Why the Fed isn’t intervening.” The story suggests the Federal Reserve is content with rising Treasury yields as it helps in the inflation battle the central bank is presently waging.
In overnight news, Australia’s central bank left its main interest rate unchanged, but said further monetary policy tightening may be warranted.
The key outside markets today see the U.S. dollar index higher and hitting another 10-month high. Nymex crude oil prices are a bit weaker and trading around $88.50 a barrel. Meantime, the benchmark U.S. Treasury 10-year note yield is presently fetching 4.699% and this week has hit a 16-year high. December Comex gold futures hit a 10-month low overnight, while silver hit a 6.5-month low.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the IDB/TIPP economic optimism index and domestic auto industry sales.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 4,383.50 and then at 4,400.00. Support for active traders is seen at this week’s low of 4,295.50 and then at last week’s low of 4,277.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last week’s high of 15,060.75 and then at 15,200.00. On the downside, shorter-term support is seen at this week’s low of 14,826.00 and then at 14,700.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower 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 bearish early today. Shorter-term technical resistance is seen at Monday’s high of 113 24/32 and then at 114 even. Shorter-term support lies at the contract low of 111 31/32 and then at 111 20/32. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower and hit a contract low 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 107.14.0 and then at Monday’s high of 107.29.5. Shorter-term technical support is seen at 107.00.0 and then at 106.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are lower and hit a 10-month low in early U.S. trading. Prices are trending lower and bears are in solid near-term technical control. 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.0550 and then at 1.0600. Shorter-term support is seen at the overnight low of 1.0494 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower and hit a more-than-two-week low in early U.S. trading. 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 $90.00 and then at Monday’s high of $91.88. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mostly lower in overnight trading. Not much new. Harvesting of soybeans and corn is in full swing and that is a bearish seasonal factor amid commercial hedge selling. Technicals remain fully bearish for corn and wheat, and moderately bearish for soybeans and meal.
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