Tuesday, November 14–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed but mostly weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Stock market traders early this week are concerned about slack progress on the U.S. tax-reform legislation working its way through Congress.
In overnight news, the Euro zone reported its third-quarter GDP at up 0.6% from the second quarter and up 2.5%, year-on-year. Those numbers were right in line with market expectations.
The key outside markets on Tuesday find U.S. dollar index weaker in early U.S. trading. The greenback bulls still have the slight overall near-term technical advantage, but trading has turned choppy.
Meantime, Nymex crude oil futures prices are slightly lower and are trading around $56.50 a barrel. It is still my bias that Nymex crude won’t be able to sustain prices at or above $60.00 a barrel. The IEA warned on Tuesday the oil price rally is in jeopardy because of weaker-than-expected demand this year and likely next year, too.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the producer price index. The PPI report is one of the more important reports of the week. PPI in October is forecast to come in at up 0.1% from September.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are weaker in early U.S. trading, on mild profit taking after hitting a contract and record high last week. Bulls still have the overall near-term technical advantage. However, price action last week confirmed a bearish “key reversal” down on the daily bar chart, which is an early technical clue that a market top is in place. The 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 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 Monday’s high of 2,585.50 and then at the contract high of 2,594.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,570.25 and then at last week’s low of 2,563.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index December futures: Prices are slightly higher in early U.S. trading. Lower price action last week confirmed a bearish “key reversal” down on the daily bar chart, which is an early technical clue that a market top is in place. But the bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 Monday’s high of 6,325.00 and then at the contract high of 6,351.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,281.00 and then at last week’s low of 6,244.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher in early U.S. trading, on more short-covering after recent selling pressure. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 152 30/32 and then at 153 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 152 1/32 and then at 151 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer in early U.S. trading, on more short covering. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 124.29.0 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.16.0 and then at 124.10.0. 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 lower in early U.S. trading. The shorter-term moving averages for the dollar index are neutral as the 4-day is below 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 Monday’s high of 94.545 and then at 94.865. Shorter-term support is seen at 94.000 and then at 93.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage amid a near-term price uptrend being in place. Look for buy stops to reside just above technical resistance at Monday’s high of $57.15 and then at last week’s high of 57.92. Look for sell stops just below technical support at Monday’s low of $56.30 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were mixed overnight. Bears have the power to suggest a bit more downside price pressure in the near term.