Monday, October 9–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher in overnight trading. There were some significant geopolitical events occurring over the weekend, but the world marketplace has so far Monday shrugged them off as mostly nothing new. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. The U.S. stock indexes are at or near record highs.
Gold prices are solidly higher in pre-U.S.-session trading Monday. Short covering and bargain hunting are featured following recent selling pressure that drove gold and silver prices to a two-month low last week.
Thousands of Spaniards on Sunday protested any secession of Catalonia, after that region voted to be independent recently. The U.S. and Turkey saw a diplomatic row escalate over the weekend when both countries put restrictions on visas for the other country. The Turkish lira dropped sharply Monday on the situation. And the U.S.-North Korea war of words continued during the weekend, with both sides spouting off.
The U.S. dollar index is weaker in early U.S. trading, on a normal corrective pullback after hitting a 2.5-month high on Friday. The other key outside market on Monday morning sees Nymex crude oil futures prices near steady. Oil bulls are fading. There are worries recent hurricanes that struck the U.S. will curtail petroleum refining capacity, which means less demand for crude until those refineries are 100% back on line.
The U.S. government is closed for the Columbus Day holiday Monday. However, most markets are open. U.S. economic data due for release Monday includes the employment trends index.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are firmer in early U.S. trading, and close to last week’s contract and record highs. The market is still well overbought and due for a downside correction very soon. The 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 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 2,565.00 and then at 2,575.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,543.25 and then at 2,534.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are higher and hit another contract and record high overnight. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 6,085.00 and then at 6,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,059.50 and then at 6,037.50. 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 firmer on short covering after hitting a nine-week low Friday. Prices are in a four-week-old downtrend on the daily bar chart. 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 bearish early today. Shorter-term technical resistance is seen at Friday’s high of 152 12/32 and then at 153 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 151 28/32 and then at last week’s low of 151 7/32 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering after hitting a 2.5-month low on Friday. Bears still have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. 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 neutral early today. Shorter-term resistance lies at Friday’s high of 125 7/32 and then at 125.14.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.00.0 and then at last week’s low of 124.22.5. 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 slightly lower in early U.S. trading, on a corrective pullback after hitting a 2.5-month high on Friday. 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.670 and then at last week’s high of 94.100. Shorter-term support is seen at 93.250 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. Bulls have lost their overall near-term technical advantage. There are stiff chart resistance layers that lie just overhead, to suggest that a market top is in place. Look for buy stops to reside just above technical resistance at $50.00 and then at Friday’s high of $50.82. Look for sell stops just below technical support at $49.00 and then at $48.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were slightly lower overnight. While I do think there is not much, if any, downside left in the grains following the selling pressure in recent months, I don’t look for any significant rallies right during the U.S. corn and soybean harvesting.