Tuesday, November 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European stock markets were mostly lower overnight. Asian stock indexes were mostly firmer. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
Focus this week is on the upcoming Group of 20 meetings that begin late this week in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war that appears to show no signs of de-escalating. President Trump made more hardline comments on the matter Monday. There is general agreement that the trade war is hurting China’s economy much more than the U.S. economy.
There is talk in the marketplace recently that the U.S. Federal Reserve may take a more dovish tone on its monetary policy due to notions the recent strong U.S. economic growth may be quickly decelerating. The Federal Open Market Committee meets to discuss monetary policy in late December. It’s widely expected the Fed will slightly raise its key Fed funds target range in December. However, a commentary in the Wall Street Journal today said Fed monetary policy will be “wide open” for 2019, which could lead to more uncertainty in the marketplace.
Nymex crude oil futures prices are slightly firmer today on mild short covering and a corrective rebound after hitting a 13-month low of $50.10 on Monday. Crude prices are down around 20% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week.
The other key outside market today finds the U.S. dollar index trading slightly higher but not far below this month’s 1.5-year high.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the quarterly house price index, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bears have the 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 the overnight high of 2,690.00 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,650.00 and then at last week’s low of 2,630.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are weaker 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,740.00 and then at 6,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,561.25 and then at last week’s low of 6,480.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading 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 neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 139 18/32 and then at last week’s high of 139 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 139 even and then at 138 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are firmer in early U.S. trading 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 neutral to bearish early today. Shorter-term resistance lies at Monday’s high of 119.06.0 and then at last week’s high of 119.09.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 118.29.5 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March 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 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 overnight high of 96.620 and then at the November high of 96.930. Shorter-term support is seen at the overnight low of 96.330 and then at Monday’s low of 96.040. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
January Nymex crude oil prices are near steady after hitting a 13-month low of $50.10 Monday. 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 neutral early today. Look for buy stops to reside just above technical resistance at $52.00 and then at $53.00. Look for sell stops just below technical support at $51.00 and then at $50.10. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices are set to open mixed to firmer today, on short covering. There fading ideas in the grain markets regarding the U.S. and China reaching a trade deal on Saturday when the U.S. and China presidents meet in Argentina. 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