Tuesday, September 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer again overnight. Early this week has seen trader and investor risk appetite return to the world marketplace. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock indexes are at or near record highs. The world stock markets are so far “thumbing their noses” at what have been historically troublesome months of September and October.
News the United Nations Security Council late Monday imposed new sanctions on North Korea that were not as harsh as the U.S. wanted is being perceived as somewhat de-escalating the tensions between the U.S. and North Korea.
Gold prices are lower in pre-U.S.-session trading, on more profit taking and on the “risk-on” trader mentality in the marketplace early this week.
The key outside markets on Tuesday morning see the U.S. dollar index slightly lower. Meantime, Nymex crude oil futures are also slightly lower this morning.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NFIB small business index.
The key U.S. economic data point of the week is Thursday’s consumer price index report for August. That report is expected to show a rise of 0.4%.
Notions are growing that low inflation in the U.S. and the Euro zone will keep the Federal Reserve and European Central Bank from tightening their monetary policies as soon as they would like. However, recent economic data from China and the U.K. do point to a modest pick-up in inflation. On Tuesday the August producer price index in the U.K. was reported up 0.6% from July and up 2.9%, year-on-year.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are higher and set a contract and record high in early U.S. trading. 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 with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,500.00 and then at 2,515.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,477.00 and then at Monday’s low of 2,466.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are higher in early U.S. trading today. Prices are not far below this month’s record high. 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 with the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the contract and record high of 6,025.75 and then at 6,050.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 5,942.00 and then at 5,915.00. 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 lower again in early U.S. trading, on more profit taking after hitting a contract high last Friday. Bulls still have the firm overall near-term technical advantage but are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 156 3/32 and then at Monday’s high of 156 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at 155 even and then at 154 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower on more profit taking after hitting a contract high last Friday. Bulls still have the firm overall near-term technical advantage, but are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 127.00.0 and then at Monday’s high of 127.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.20.0 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Tepid short covering is featured after prices hit a 2.5-year low last Friday. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at 92.000 and then at 92.250. Shorter-term support is seen at 91.500 and then at Monday’s low of 91.165. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly lower in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Look for buy stops to reside just above technical resistance at $48.50 and then at $49.00. Look for sell stops just below technical support at $47.50 and then at Monday’s low of $47.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were weaker overnight. Traders are awaiting Tuesday’s monthly USDA supply and demand report, which is not expected to be bullish. There are still early chart clues that market bottoms are in place (seasonal harvest lows) for corn and beans. And if corn and beans have put in market bottoms, it’s likely wheat has, too. Still, market bottoms being in place do not automatically suggest price uptrends are under way. It could mean choppy and sideways trading at lower levels for some time.