Thursday, October 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in quieter trading overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Stock markets and other financial markets are on hold as traders and investors are awaiting the key markets event of the week: Thursday’s European Central Bank regular monetary policy meeting. Many expect the ECB to announce more details on the winding down of its big bond-buying program.
The Euro currency could see volatile price action in the immediate aftermath of the ECB meeting, including ECB Chief Mario Draghi’s press conference.
Gold prices are near steady in pre-U.S.-session trading. The yellow metal bears still have technical momentum on their side.
The key “outside markets” on Thursday morning find the U.S. dollar index near steady. Meantime, Nymex crude oil futures prices are slightly higher and trading above $52.00 a barrel.
The most important U.S. economic report of the week is Friday morning’s advance third-quarter GDP estimate. The number is expected to come in at up 2.7% versus the second-quarter reading of up 3.1%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the advance economic indicators report, pending home sales, and the Kansas City Federal Reserve manufacturing survey.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the firm overall near-term technical advantage and there are no strong, early technical clues that a market top is close at hand. The 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 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 this week’s high of 2,570.25 and then at the contract high of 2,577.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,541.50 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly higher in early U.S. trading. Bulls have the firm technical advantage. 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 neutral to bearish early today. Shorter-term technical resistance is seen at Tuesday’s high of 6,092.50 and then at 6,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,050.00 and then at 6,025.00. 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 on short covering after hitting a 3.5-month low on Wednesday. Bears have the near-term technical advantage. 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 technical resistance is seen at Wednesday’s high of 151 20/32 and then at 152 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 150 29/32 and then at this week’s low of 150 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer on short covering after hitting a 5.5-month low on Wednesday. Bears have the technical advantage. 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 to bullish early today. Shorter-term resistance lies at the overnight high of 124.23.5 and then at 124.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.15.5 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 near steady 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 even with the 18-day moving average. Short-term oscillators for the dollar index are neutral 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 93.365 and then at 93.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the October high of 52.65 and then at the September high of $53.11. Look for sell stops just below technical support at this week’s low of $51.55 and then at last week’s low of $50.87. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were narrowly mixed overnight. Traders will closely examine this morning’s weekly USDA export sales report. Harvest progress in the U.S. Corn Belt proceeding well. Recent price action in the grains still hints at market bottoms in place.