Tuesday, November 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight, following the solid losses posted in the U.S. stock indexes on Monday. Technology stocks are taking the brunt of the selling pressure recently. It still appears the U.S. stock indexes put in at least near-term tops last month, if not major market tops. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
It could be a quieter trading week as the U.S. Thanksgiving holiday falls on Thursday. U.S. markets close early Wednesday, with Friday the “Black Friday” sale affair that finds many traders and investors out for the day, shopping for Christmas gift deals.
The key outside markets today find the U.S. dollar index trading slightly higher and not far below this month’s 1.5-year high. Meantime, Nymex crude oil futures prices are slightly higher on a corrective bounce after hitting an 11-month low last week.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, and new residential construction.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bears have regained downside momentum. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,725.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,671.25 and then at 2,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index December futures: Prices are lower and hit a seven-month low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,670.00 and then at 6,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,574.25 and then at 6,500.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher and hit a seven-week high in early U.S. trading today, on some safe-haven demand amid a wobbly U.S. stock market, and on short covering. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 140 4/32 and then at 140 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 139 19/32 and then at 139 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly up and hit a seven-week high in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at the overnight high of 119.14.0 and then at 119.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.06.0 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading. Bulls have the firm 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the Monday’s high of 96.435 and then at last Friday’s high of 96.920. Shorter-term support is seen at the overnight low of 95.930 and then at the November low of 95.485. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are near steady in early U.S. trading. Bears are still in solid near-term technical control. There are still no early clues that a market bottom is close at hand. 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 last Friday’s high of $58.16 and then at $59.00. Look for sell stops just below technical support at the overnight low of $56.51 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were steady to narrowly mixed overnight. There are mixed ideas in the grain markets regarding the U.S. and China reaching a trade deal any time soon. Look for the markets to continue to gyrate on fresh news regarding the matter. The grain market bears still have the overall near-term technical advantage.
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