Thursday, September 26–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The up-and-down U.S.-China trade rhetoric is presently in “up” mode following positive comments on the matter from President Trump on Wednesday. Then on Thursday China’s Commerce Ministry said Chinese companies will buy “sizeable amounts” of U.S. soybeans and pork ahead of high-level trade discussions scheduled to take place in October.
However, the positive news on the world trade front is being blunted by the U.S. House of Representatives considering impeaching Trump over what the House says are illegal comments Trump made to a Ukrainian official. The Trump administration on Wednesday released the transcript of his comments to the official, which is being spun by both Republicans and Democrats to each’s favor. Whether Trump actually gets impeached seems unlikely at this time. However, the inquiry by the House is very likely to bog down the U.S. government to a standstill on new legislation, and is likely to hurt Trump’s foreign policy agenda, including trade negotiations with China.
Upbeat economic data coming out of Germany is also assuaging European investors late this week. A consumer sentiment report Thursday showed a higher reading in October than in September, and the October number was also higher than expected. Recent economic data coming out of Germany had been dour.
Nymex crude oil prices are slightly up and trading around $56.60 a barrel. The other key outside market today sees the U.S. dollar index trading slightly higher and not far below the high for the year.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of second-quarter gross domestic product, revised corporate profits, the advance economic indicators report, the Kansas City Fed manufacturing survey, and pending home sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at 3,000.00 and then at this week’s high of 3,012.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,970.00 and then at this week’s low of 2,953.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls have the overall 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 early today. Shorter-term technical resistance is seen at 7,850.00 and then at this week’s high of 7,904.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,783.75 and then at 7,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 162 1/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at 161 even and then at this week’s low of 160 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term support lies at the overnight low of 129.29.0 and then at this week’s low of 129.18.5. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 130.07.0 and then at 131.13.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer and hit a three-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-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 the contract high of 98.90 and then at 99.000. Shorter-term support is seen at the overnight low of 98.495 and then at 98.250. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have lost their overall near-term technical advantage and are fading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Wednesday’s high of $57.02 and then at $58.00. Look for sell stops just below technical support at this week’s low of $55.55 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures prices were firmer in overnight trading. Corn was up around 1 cent, soybeans about 4 cents higher and wheat about 7 cents higher. The upbeat US-China trade rhetoric late this week is bullish for grains. Weather in the US Corn Belt has been too wet in some areas and too dry in others, which is prompting some concerns about crop quality as harvest is under way. The northern US plains and the Canadian prairies have also been too wet for ideal crop conditions. The strong US dollar on the foreign exchange market (the US dollar index is near the high for the year at present) is an underlying negative for the US grains, making them more expensive on the world market. US grain exports have already been anemic and the strong greenback won’t help matters.
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
What next gold silver 2020/21?