Tuesday, October 3–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The S&P 500 index scored another record high overnight. Risk appetite is back in the marketplace despite geopolitics and this being the historically troublesome month of October.
Gold prices are weaker again and hit a seven-week low overnight. Prices are in a steep three-week-old downtrend on the daily bar chart and the bears have the near-term technical advantage.
In overnight news, the Euro zone reported its August producer price index was up 0.3% from July and up 2.5%, year-on-year. Those numbers were a bit hotter than expected.
Australia’s central bank held its monetary policy steady at its regular meeting Tuesday.
The U.S. dollar index is slightly higher and hit a six-week high in early U.S trading Tuesday. Greenback bulls have momentum as prices have been trending higher for three weeks.
The other key outside market on Tuesday morning sees Nymex crude oil futures slightly lower. Prices last week hit a five-month high and then backed off Monday on profit taking. While the oil bulls still have the overall near-term technical advantage, there are stiff chart resistance layers above the recent high.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly higher and hit another contract and record high in early U.S. trading. 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 early today. Today, shorter-term technical resistance comes in at 2,540.00 and then at 2,550.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,517.00 and then at 2,500.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are slightly up in early U.S. trading today. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 6,009.00 and then at the contract high of 6,025.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 5,958.50 and then at 5,933.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a three-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 152 24/32 and then at Monday’s high of 153 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 even and then at 151 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in overnight trading. Prices Monday hit a 2.5-month low. Bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 125.09.5 and then at Monday’s high of 125.12.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 124.30.0 and then at 124.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is near steady in early U.S. trading after hitting a seven-week high overnight. Greenback bulls still have upside momentum. 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 neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.775 and then at 94.000. Shorter-term support is seen at Monday’s low of 92.940 and then at 92.800. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. Prices last week hit a five-month high but then saw profit taking on Monday. Bulls still have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $51.00 and then at Monday’s high of $51.71. Look for sell stops just below technical support at $50.00 and then at $49.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were mixed to weaker overnight. Not much new. The resiliency of the grain markets the past couple weeks has been impressive, which makes me suspect that harvest lows are in place and that prices will at least work sideways, if not sideways-to-higher, into the end of the year. But don’t look for big rallies right during the U.S. corn and soybean harvesting.