Thursday, October 21–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. The U.S. stock market bulls are back in business as the S&P 500 and the Nasdaq indexes are closing on their record highs scored in September. A good corporate earnings season has lifted trader and investor risk sentiment as they work through what can be the historically difficult month of October. For the moment it appears the marketplace has pushed to the back burner rising inflation and the prospect of major global economies slowing down in their post-pandemic recoveries.
The key outside markets today see the U.S. dollar index firmer. Crude oil prices are lower and trading around $83.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.654%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales and leading economic indicators.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are a bit weaker but not far below the record high scored in September. Bulls have the solid overall near-term technical advantage as prices are trending up again. 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 early today. Today, shorter-term technical resistance comes in at the record high of 4,539.50 and then at 4,565.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 4,471.75 and then at this week’s low of 4,436.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly down in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at this week’s high of 15,446.50 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Tuesday’s low of 15,269.00 and then at this week’s low of 15,038.75. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly weaker 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 neutral early today. Shorter-term technical resistance is seen at 158 15/32 and then at 159 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 10/32 and then at the October low of 157 3/32. 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. 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 neutral to bullish early today. Shorter-term resistance is seen at Wednesday’s high of 130.24.0 and then at this week’s high of 130.31.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 130.08.0 and then at 130.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1681 and then at 1.1700. Buy stops likely reside just above those levels. Shorter-term support is seen at Tuesday’s low of 1.1620 and then at this week’s low of 1.1584. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are a bit lower in early U.S. trading after hitting a seven-year high overnight. Bulls have the solid 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance in at the overnight high of $83.96 and then at $85.00. Look for sell stops just below technical support at $82.00 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were lower overnight on some profit taking from this week’s good gains. Inflation worries and some global raw commodity supply shortages are likely luring speculative buying interest into the grain markets and that could continue to push prices higher. Corn and soybean bears still have the overall near-term technical advantage. Wheat bulls remain in firm technical command. Due out today is the weekly USDA export sales 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