Friday, November 16–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed in subdued trading overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
In overnight news, the Euro zone consumer price index for October was reported up 0.2% from September and up 2.2%, year-on-year. Those numbers were in line with market expectations.
European traders and investors are still focused on the turmoil in the U.K. government regarding the U.K’s exit from the European Union (Brexit). The uncertainty of the matter has pressured European stock markets, the Euro currency and the British pound.
The key outside markets today find the U.S. dollar index trading slightly lower but still not far below this week’s 1.5-year high. The strong U.S. economy compared to most other world economies, and the interest rate differentials in those economies that see U.S. rates significantly higher, are bullish underlying elements that are likely to continue to provide strong support for the greenback.
Meantime, Nymex crude oil futures prices are higher on a corrective bounce after hitting and 11-month low of $54.75 earlier this week. The steep slide in oil prices is a bearish element for most of the raw commodity sector, as oil is arguably the leader of that sector.
U.S. economic data due for release Friday includes industrial production and capacity utilization, the Kansas City Fed manufacturing survey, and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,732.25 and then at Wednesday’s high of 2,748.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,700.00 and then at this week’s low of 2,671.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index December futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,886.75 and then at Thursday’s high of 6,920.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,800.00 and then at 6,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bears still have the overall near-term technical advantage, but gains this week begin to suggest a market bottom is in place. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 139 1/32 and then at this week’s high of 139 14/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 138 18/32 and then at 138 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 118.29.5 and then at 119.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.24.5 and then at Thursday’s low of 118.19.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. 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 to bullish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 97.245 and then at this week’s high of 97.530. Shorter-term support is seen at this week’s low of 96.585 and then at 96.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are higher in early U.S. trading, on short covering in a bear market. Bears are still in solid near-term technical control. There are still 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 bullish early today. Look for buy stops to reside just above technical resistance at $58.00 and then at $59.00. Look for sell stops just below technical support at the overnight low of $56.42 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were steady to weaker. Traders will closely examine today’s weekly USDA export sales data, delayed by one day due to the Veterans Day holiday on Monday. There are now mixed ideas in the grain markets regarding the U.S. and China reaching a trade deal any time soon. The grain market bears still have the overall near-term technical advantage.
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