Friday, October 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. Many world stock indexes are at or near record or multi-year highs. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
Stock market traders and investors are focusing on upbeat world economic growth prospects as a bullish tonic. However, they are paying little attention to geopolitics. If the stock market community does begin to pay more attention to geopolitics (which will likely be the case) then look for increased money flows out of equities and into hard assets like gold and other raw commodities.
New on the geopolitical front Friday morning are reports that President Trump is ready to decertify the U.S-Iran nuclear agreement from the Obama administration. Also, reports said Brexit talks between the U.K. and the European Union are not going well.
Gold prices are slightly down in pre-U.S.-session trading. Gold bulls have had a good week, overall, as prices are close to pushing above the key $1,300.00 level.
In overnight news, China’s exports were up 8.1% in September, year-on-year, while its imports were up 18.7%. The exports figure was lower than expected and the imports number was higher than expected.
The U.S. dollar index is near steady in early U.S. trading Friday. The greenback bears have gained downside momentum this week. The other key outside market sees Nymex crude oil futures prices higher and trading just below $52.00 a barrel. The oil bulls this week regained the near-term chart advantage.
It will be a busy day for U.S. economic data releases Friday, including the consumer price index, retail sales, real earnings, manufacturing and trade inventories, and the University of Michigan consumer sentiment survey. The consumer price index for September is the headline number of the day. The CPI is expected to come in at up 0.1% from August.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly higher in early U.S. trading, and near this week’s contract and record highs. The market is way overbought and due for a decent downside correction soon. 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 contract high of 2,553.50 and then at 2,565.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,539.25 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index December futures: Prices are slightly up and close to Thursday’s contract and record high. 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 6,097.00 and then at 6,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,039.00 and then at 6,025.00. 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 near steady in early U.S. trading. Bulls are having the better week. 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 neutral early today. Shorter-term technical resistance is seen at today’s high of 153 10/32 and then at 153 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 30/32 and then at 152 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading. Bears still have the overall near-term technical advantage, but the bulls had the better week. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at today’s high of 125 15/32 and then at 125.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 125.05.0 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bulls have faded this week. 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 neutral early today. The dollar index finds shorter-term technical resistance at 93.190 and then at this week’s high of 93.670. Shorter-term support is seen at this week’s low of 92.635 and then at 92.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher and hit a two-week high in early U.S. trading. Bulls have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $52.00 and then at $52.50. Look for sell stops just below technical support at $51.00 and then at the overnight low of $50.70. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures markets were steady to firmer overnight. Thursday’s price action after the USDS reports suggests the corn market does not have much downside potential and may have put in a bottom Thursday. Soybean bulls gained momentum to suggest the near-term price uptrend can be sustained. And wheat bears continue to struggle. Still, if corn and soybeans can rally, wheat will follow.