Wednesday, October 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are set to open the New York day session higher. After selling off Tuesday afternoon following a tweet from President Trump that called for an end to additional Covid stimulus package negotiations with the Democrats, U.S. stock indexes rebounded overnight when Trump in another, later series of tweets walked back his initial tweet by saying he does want certain stimulus measures passed by Congress, including stimulus checks for Americans. The matter remains up in the air, with there still being doubts Congress can soon agree on a stimulus plan for Americans and U.S. businesses.
The gold market sold off sharply Tuesday afternoon following Trump’s first tweet calling for an end to stimulus package discussions. Lately, the gold market has been acting more like a raw commodity than a safe-haven asset. The yellow metal on many days moves in tandem with the U.S. stock indexes—like Tuesday.
The U.S. data point at mid-week is the FOMC minutes from the last meeting, to be released Wednesday afternoon. Fed Chairman Jerome Powell in a speech on Tuesday said the U.S. economy is recovering from the Covid-19 lockdowns faster than expected, but added that the pace of the recovery has slowed recently and that it could be a long “slog” before the U.S. economy fully recovers.
The important outside markets early today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $39.75 a barrel. The 10-year U.S. Treasury note yield is presently trading around 0.76%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the FOMC minutes, consumer credit, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls still have the firm 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 3,400.00 and then at this week’s high of 3,421.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,330.50 and then at 3,325.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 11,400.00 and then at this week’s high of 11,524.50. On the downside, shorter-term support is seen at this week’s low of 11,197.50 and then at last week’s low of 11,140.25. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are solidly lower in early U.S. trading. Bears have momentum. 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 technical resistance is seen at 174 16/32 and then at the overnight high of 175 even. Shorter-term support lies at this week’s low of 173 12/32 and then at 173 even. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Bulls are fading. 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 139.00.0 and then at the overnight high of 139.04.5. Shorter-term technical support lies at this week’s low of 138.23.0 and then at the August low of 138.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bulls have gained some momentum recently. The shorter-term moving averages for the Euro 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 Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1825 and then at 1.1850. Shorter-term support is seen at this week’s low of 1.1725 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $40.00 and then at $40.80. Look for sell stops just below technical support at $39.00 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are higher in early U.S. pre-market trading. Grain market bulls remain in firm technical control amid price uptrends in place. Speculators are becoming more interested in grain futures on the long side, as technical have become more bullish this week. Focus is on U.S. harvest results, which are coming in varied but mostly good. Traders are looking ahead to Friday’s monthly USDA supply and demand report.
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