Tuesday, November 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed overnight. Asian shares were down and European stock indexes were mostly up. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following steep losses suffered on Monday. Volatility in the U.S. stock market has heated up again early this week. Many traders and investors are spooked by the recent sharp drop in crude oil prices.
Nymex crude oil futures prices are lower again today, hit an eight-month low overnight and are trading around $58.50 a barrel.
Meantime, the U.S. dollar index is trading slightly lower on a mild corrective pullback after soaring to a 1.5-year high on Monday.
European investors are unsettled as Tuesday is the day Italy’s budget is supposed to fall into line with the constricts of the European Union budget process. Meantime, reports said U.K. Prime Minister Theresa May has rejected the latest European Union Brexit proposal. The Euro currency fell to a 16-month low against the U.S. dollar on Monday.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading, on a corrective bounce from Monday’s losses. 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 overnight high of 2,750.25 and then at 2,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,719.00 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index December futures: Prices are higher in early U.S. trading, on a corrective bounce from Monday’s strong losses. 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 6,950.00 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,850.00 and then at the overnight low of 6,801.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S. trading today. Bears have the firm overall near-term technical advantage. 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 Monday’s high of 138 21/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 137 26/32 and then at 137 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 slightly lower in early U.S. trading. 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 resistance lies at the overnight high of 118.15.5 and then at 118.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.07.5 and then at Monday’s low of 118.03.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower on a mild pullback after hitting a 1.5-year high on Monday. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the Monday’s high of 97.530 and then at 97.750. Shorter-term support is seen at 97.000 and then at Monday’s low of 96.800. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are lower and hit an eight-month low today. Bears are in solid near-term technical control. There are 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $59.35 and then at $60.00. Look for sell stops just below technical support at the overnight low of $58.24 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mixed overnight. The big gains in the U.S. dollar index this week are limiting buying interest in the grains. The grain market bears have the overall near-term technical advantage. Wheat’s gains on Monday appear to be just short covering from big speculative funds, as there was no follow-through strength overnight.
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