Monday, October 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward firmer openings and new record highs when the New York day session begins.
Gold prices are lower in pre-U.S.-session trading, amid the better risk appetite seen in the marketplace in recent sessions. A firmer U.S. dollar index to start the trading week is also bearish for the gold and silver markets.
In overnight news, the Japanese yen saw pressure against the U.S. dollar after Japanese elections showed Prime Minister Abe and his coalition government with a lop-sided victory in snap elections. World stock markets were buoyed on the news from Japan, as Abe is considered to be more dovish on monetary policy.
The Euro currency was pressured overnight on reports the Spanish prime minister is seeking powers to remove the leaders of the secessionist Catalonia region.
Traders and investors this week are anticipating who will be President Trump’s nominee for the next chairman of the Federal Reserve. Jerome Powell has moved to the top of the list among many Fed watchers.
Also this week the European Central Bank holds its regular monetary policy meeting on Thursday. Many expect the ECB to announce more details on the winding down of its bond-buying program.
The U.S. dollar is higher in early U.S. trading. The other key “outside market finds Nymex crude oil futures prices near steady and trading just below $52.00 a barrel.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly higher and hit another contract and record high overnight. 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 2,577.25 and then at 2,590.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,559.50 and then at last week’s low of 2,542.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are firmer in early U.S. trading and near last week’s contract and 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 the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 6,132.75 and then at 6,150.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,105.00 and then at Friday’s low of 6,090.50. 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 slightly lower in early U.S. trading. Prices Friday closed at a bearish weekly low close. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 152 12/32 and then at 153 even. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 151 25/32 and then at 151 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 near steady in early U.S. trading. Prices Friday closed at the lowest closing level in 3.5 months. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 124.28.5 and then at 125 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the October low of 124.22.5 and then at 124.20.0. 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 higher in early U.S. trading. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the October high of 94.10 and then at 94.250. Shorter-term support is seen at the overnight low of 93.560 and then at 93.250. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady in early U.S. trading. Bulls still have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of 52.30 and then at the October high of $52.65. Look for sell stops just below technical support at last week’s low of $50.87 and then at $50.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were narrowly mixed overnight. Harvest progress in the U.S. Corn Belt is in full swing, with no major delays. Hedge pressure from grain elevators will limit the upside in corn and soybeans for the next couple weeks.