Tuesday, November 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight, boosted by energy stocks as oil prices are at two-year highs. Many world stock indexes are at record or multi-year highs. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Nymex crude oil futures prices are near steady after hitting a two-year high overnight. Brent crude oil futures are also at a two-year high. The rally in the oil market is an underlying bullish element for most of the other raw commodity markets. However, it will be very tough for Nymex crude to sustain prices above $60.00 a barrel.
The other key “outside market” on Tuesday morning finds the U.S. dollar index higher and near the recent five-month high. The greenback bulls have the slight overall near-term technical advantage.
In overnight news, Australia’s central bank kept its interest rates and monetary policy unchanged at its regular monetary policy meeting. No changes were expected.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the IBD/TIPP economic optimism index, consumer installment credit, and the NFIB small business index.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading and hit another contract and record high overnight. Bulls have the solid 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 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 contract high of 2,593.50 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,575.50 and then at last week’s low of 2,562.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index December futures: Prices are slightly lower in early U.S. trading after hitting another contract and record high overnight. Bulls have the solid technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight contract high of 6,311.50 and then at 6,325.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,268.00 and then at 6,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower on a corrective pullback after hitting a three-week high on Monday. Bulls and bears are on a level overall near-term technical playing field, but the bulls still have some momentum. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 154 12/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 29/32 and then at Monday’s low of 153 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading, on a corrective pullback from recent gains. Bears have the overall near-term technical advantage but the bulls still have some momentum. 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 early today. Shorter-term resistance lies at last week’s high of 125.13.0 and then at 125.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.06.0 and then at Monday’s low of 125.03.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is higher and hit a 5.5-month high in early U.S. trading. A two-month-old uptrend is in place on the daily bar chart. The shorter-term moving averages for the dollar index are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above 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 95.250 and then at 95.500. Shorter-term support is seen at the overnight low of 94.600 and then at 94.300. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady and hit a two-year high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a near-term price uptrend being in place. Look for buy stops to reside just above technical resistance at the overnight high of 57.69 and then at $58.00. Look for sell stops just below technical support at $57.00 and then at $56.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were narrowly mixed overnight. Harvest in the U.S. Corn Belt is nearing completion. Focus has switched to world supply and demand fundamentals. Recent price action in the grains still hints at market bottoms in place. The recent rally in oil prices will give the grain bulls some momentum, too.