Wednesday, November 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly firmer overnight. U.S. stock indexes are also pointed higher at the New York opening, following strong losses on Tuesday that wiped out this year’s gains in the stock indexes. It still appears the U.S. stock indexes have put in at least near-term tops, if not major market tops.
Today is likely to see a quieter trading session in the U.S., ahead of the U.S. Thanksgiving holiday on Thursday. Many U.S. markets close early Wednesday. Friday is the “Black Friday” sale affair that finds many traders and investors out for the day, shopping for Christmas gift deals.
In overnight news, the Paris-based OECD think tank forecast slowing global economic growth in 2019—to 3.5% from 3.7% in its previous forecast.
The key outside markets today find the U.S. dollar index trading weaker but not far below this month’s 1.5-year high. Meantime, Nymex crude oil futures prices are higher on a corrective rebound from Tuesday’s sharp losses that pushed prices to a 12-month low of $52.77 a barrel.
U.S. economic data due for release Wednesday includes the weekly jobless claims report, the weekly MBA mortgage applications survey, durable goods orders, leading economic indicators, the University of Michigan consumer sentiment survey, existing home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer on a corrective bounce in early U.S. trading, after hitting a seven-month low on Tuesday. Bears have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,725.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,631.75 and then at the October low of 2,603.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index December futures: Prices are higher on short covering after hitting a 7.5-month low on Tuesday. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 6,670.00 and then at 6,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,509.00 and then at Tuesday’s low of 6,449.50. 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 lower on a corrective pullback after hitting a seven-week high on Tuesday. The market has seen some safe-haven demand amid a wobbly U.S. stock market. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 139 30/32 and then at this week’s high of 140 9/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 139 15/32 and then at this week’s low of 139 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker on a corrective pullback today after hitting a seven-week high on Tuesday. 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 bearish early today. Shorter-term resistance lies at the overnight high of 119.08.5 and then at this week’s high of 119.14.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.00.5 and then at 118.24.0. 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 weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, 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 this week’s high of 96.770 and then at 97.000. Shorter-term support is seen at this week’s low of 95.930 and then at the November low of 95.485. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
January Nymex crude oil prices are higher on a corrective bounce after hitting a 12-month low of $52.77 on Tuesday. Bears are in solid near-term technical control. There are still no early clues that a market bottom is close at hand. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $55.00 and then at $56.00. Look for sell stops just below technical support at $54.00 and then at $52.77. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were steady to narrowly mixed overnight. There are mixed ideas in the grain markets regarding the U.S. and China reaching a trade deal any time soon—and grain markets are reacting to the daily rhetoric coming out of the U.S. and China. Look for the markets to continue to gyrate on fresh news regarding the matter. The grain market bears still have the overall near-term technical advantage.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff