Thursday, October 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The bourses are seeing some profit taking after recently hitting record or multi-year highs. Today is the 30th anniversary of the “Black Monday” record-setting crash of the U.S. stock market.
Gold and silver prices are firmer in pre-U.S.-session trading, on a bit of safe-haven demand amid the drop in world stock markets today.
In overnight news, China’s gross domestic product was reported up 6.8% in the third quarter, year-on-year. That’s just a bit down from the 6.9% rate in the second quarter.
The rift between Spain and its Catalonia region deepened Thursday when the Catalan leader did not respond to a government order to stop his secessionist plans. Spanish government officials are holding an emergency meeting on the matter.
China on Wednesday started its twice-a-decade Party Congress meetings, in which major economic and cultural planning initiatives are laid out for the next five years. Traders and investors will keep a close watch for any pronouncements coming out of those meetings.
The key “outside markets” Thursday morning see the U.S. dollar index slightly lower. Meantime, Nymex crude oil futures prices are lower and trading above $51.00 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are lower in early U.S. trading, on profit taking after hitting a contract and record high Wednesday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,562.25 and then at 2,575.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,542.50 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index December futures: Prices are lower on profit taking after hitting a contract and record high Wednesday. Shorter-term moving averages (4- 9-and 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at 6,100.00 and then at 6,120.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,055.00 and then at 6,025.00. 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 higher in early U.S. trading. Trading has turned choppy this week. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last week’s high of 154 5/32 and then at 154 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 152 25/32 and then at 152 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. 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 to bullish early today. Shorter-term resistance lies at 125.16.0 and then at 125 20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 125.01.5 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is weaker in early U.S. trading. The shorter-term moving averages for the dollar index are neutral early today 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 the overnight high of 93.425 and then at this week’s high of 93.655. Shorter-term support is seen at this week’s low of 92.930 and then at 92.590. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at this week’s high of $52.37 and then at the September high of $52.86. Look for sell stops just below technical support at the overnight low of $51.17 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were firmer overnight. Traders will closely examine this morning’s weekly USDA export sales report. 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.