Friday, November 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European stock markets were mixed overnight, while Asian equities were mostly down. Japan’s markets were closed for a public holiday. U.S. stock indexes are pointed lower at the New York opening. Recent losses have wiped out this year’s gains in the U.S. stock indexes. It appears the U.S. stock indexes have put in major market tops.
The U.S.-China trade war is not improving and could be escalating. Reports say the U.S. is talking to its allies regarding boycotting a Chinese technology firm due to cybersecurity risks. This news followed the mid-week report from the U.S. Trade Representative that accused China of continued theft of U.S. technology and espionage. U.S. President Trump and Chinese President Xi are scheduled to meet face-to-face in Argentina next week.
Nymex crude oil futures prices are sharply lower today and hit 13-month low of $51.73 a barrel. The steep drop in oil prices has world stock market traders uneasy, despite the fact lower retail gasoline prices will boost consumer spending, especially in the U.S.
The other key outside markets today find the U.S. dollar index trading higher and not far below this month’s 1.5-year high.
History shows today is likely to see a very quiet trading session in the U.S., following the U.S. Thanksgiving holiday on Thursday. Many U.S. markets close early today. Friday is the “Black Friday” U.S. sale affair that finds many traders and investors out for the day, shopping for Christmas gift deals.
U.S. economic data due for release Friday is light and includes the U.S. flash services and manufacturing PMIs.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading and poised to close at a seven-month low close today, if these early losses hold. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,656.25 and then at Wednesday’s high of 2,671.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,632.25 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: 4.0
December Nasdaq index December futures: Prices are lower in early U.S. trading today. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,598.00 and then at Wednesday’s high of 6,647.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,500.00 and then at this week’s low of 6,449.50. 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 firmer and poised to close at a seven-week high close today, if early gains hold. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 140 9/32 and then at 141 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 139 22/32 and then at 139 14/32. 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 today and poised to close at a seven-week high close today. 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 bullish early today. Shorter-term resistance lies at this week’s high of 119.14.0 and then at 119.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.04.0 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is even with 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 96.825 and then at 97.000. Shorter-term support is seen at 96.205 and then at this week’s low of 95.930. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
January Nymex crude oil prices are sharply lower and hit a 13-month low of $51.73 overnight. Bears are in solid near-term technical control. There are 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 bearish early today. Look for buy stops to reside just above technical resistance at $53.00 and then at $54.00. Look for sell stops just below technical support at $51.73 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
Grain futures prices are set to open narrowly mixed today. Traders will closely examine this morning’s weekly USDA export sales report. There fading ideas in the grain markets regarding the U.S. and China reaching a trade deal any time soon and that’s bearish for the grains. Look for the markets to continue to gyrate on fresh news regarding the U.S.-China trade matter. The grain market bears 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