Wednesday, November 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight, pressured by falling raw commodity markets, especially crude oil. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
It’s a very heavy slate of U.S. economic data due for release Wednesday, including the weekly MBA mortgage applications survey, the consumer price index, real earnings, the Empire State manufacturing survey, retail sales, manufacturing and trade inventories, Treasury international capital data, and the weekly DOE liquid energy stocks report.
The consumer price index (CPI) and retail sales will be the U.S. data highlights today. CPI in October is forecast to come in at up 0.1% from September and up 2.0%, year-on-year. Retail sales in October are forecast to come in up 0.1% from September.
The key outside markets on Wednesday morning find U.S. dollar index lower and hitting a three-week low in early U.S. trading. The greenback bulls are fading fast this week. Meantime, the Euro currency surged to a three-week high today and the Euro bulls have gained power to suggest at least sideways trading in the near term, if not sideways to higher.
Meantime, Nymex crude oil futures prices are lower and are trading around $55.00 a barrel. Prices are well down from the early-November high and the crude oil market may have topped out. It is still my bias that Nymex crude won’t be able to sustain prices at or above $60.00 a barrel. The IEA warned on Tuesday the oil price rally is in jeopardy because of weaker-than-expected demand this year and likely next year, too.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are lower in early U.S. trading, on more profit taking after hitting a contract and record high last week. Bulls still have the overall near-term technical advantage, but are fading. Price action last week confirmed a bearish “key reversal” down on the daily bar chart, which is an early technical clue that a market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,577.00 and then at this week’s high of 2,585.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,562.00 and then at 2,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index December futures: Prices are lower in early U.S. trading. Lower price action last week confirmed a bearish “key reversal” down on the daily bar chart, which is an early technical clue that a market top is in place. But the bulls still have the overall near-term 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. 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 6,294.75 and then at this week’s high of 6,325.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,250.00 and then at 6,225.00. 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 solidly higher in early U.S. trading, on more short-covering after recent selling pressure. 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 early today. Shorter-term technical resistance is seen at the overnight high of 153 28/32 and then at 154 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 1/32 and then at 152 16/32. 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, on more short covering. Bears still have the overall near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 125.05.0 and then at 125.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.00.0 and then at the overnight low of 124.24.5. 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 lower and hit a three-week low in early U.S. trading. Bulls are fading. The shorter-term moving averages for the dollar index are neutral as the 4-day is below the 9-day and 18-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 93.795 and then at 94.000. Shorter-term support is seen at the overnight low of 93.350 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading fast this week. Look for buy stops to reside just above technical resistance at $55.50 and then at 56.00. Look for sell stops just below technical support at this week’s low of $54.81 and then at $54.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures markets were mixed overnight. Not much new in the grains. U.S. harvest is wrapping up, with more bountiful crops than expected. Bears have the power to suggest a bit more downside price pressure in the near term.