Friday, October 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. Global equities were boosted overnight in part on news the U.S. Senate passed a tax-reform blueprint package late Thursday. If the so-called blueprint becomes law it would likely help to stimulate the U.S. economy.
Gold prices are lower in pre-U.S.-session trading amid the keener risk appetite in the marketplace Friday, and on a higher U.S. dollar index. The greenback was also supported on the U.S. Senate passage of the tax-reform blueprint.
The Euro currency is under pressure late this week after the Spanish government got a rebuke from the Caladonia region’s leader on Thursday. Spanish government officials are holding an emergency meeting Saturday to discuss tightening their grip on the Caladonia region.
The other key “outside market” Friday morning sees Nymex crude oil futures prices lower and trading just below $51.00 a barrel. The oil market bulls have the slight overall near-term technical advantage.
U.S. economic data due for release Friday is light and includes existing home sales. Fed Chair Janet Yellen also gives a lecture, but it’s not certain she will talk about current U.S. monetary policy.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are higher and hit another contract and record high overnight. 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 the overnight contract high of 2,571.25 and then at 2,585.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,559.50 and then at this week’s low of 2,542.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above 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 the contract high of 6,132.75 and then at 6,150.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,090.50 and then at 6,075.00. 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 sharply lower in early U.S. trading and poised to close at a bearish weekly low close today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 153 even and then at the overnight high of 153 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 12/32 and then at 152 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are solidly lower in early U.S. trading and are poised to close at the lowest closing level in months. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 125.08.0 and then at the overnight high of 125 13.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.28.5 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 firmer in early U.S. trading. 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 bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 93.655 and then at 94.000. Shorter-term support is seen at this week’s low of 92.910 and then at 92.590. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S. trading. Bulls still have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of 51.57 and then at $52.00. Look for sell stops just below technical support at the overnight low of $50.70 and then at $50.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures markets were mixed overnight. Harvest progress in the U.S. Corn Belt is in full swing, with no major delays. Hedge pressure from grain elevators will limit the upside in corn and soybeans for the next couple weeks.