Friday, November 8–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed to mostly weaker overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Traders and investors on this day are not quite so confident the U.S. and China are close to signing a partial trade deal. Now reports are saying there is heavy resistance among some inside the Trump administration to acquiesce to China by rolling back trade tariffs on Chinese imports to the U.S. One Trump trade official late Thursday said there is still no agreement in place and the ultimate decision lies with the mercurial President Trump. Much of this week had seen global equity markets in rally mode on notions of a soon-completed “Phase 1” of the U.S.-China trade agreement.
In overnight news, China’s October exports fell 0.9% year-on-year, which was better than the 3.1% drop expected. China’s imports were down 6.4% in October, year-on-year, while a drop of 8.6% was forecast.
A feature in the marketplace this week besides record highs in the U.S. stock indexes is rising U.S. bond yields, which hit a three-month high on Thursday.
The key “outside markets” today see the U.S. dollar index up and at a three-week high. Nymex crude oil prices are lower and trading around $56.15 a barrel.
U.S. economic data due for release Friday includes monthly wholesale trade and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The 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 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 3,097.00 and then at 3,120.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 3,063.00 and then at 3,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bulls still have the solid near-term technical advantage to suggest more upside in the near term. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 8,248.25 and then at the contract high of 8,282.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 8,200.00 and then at this week’s low of 8,161.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading as bulls are trying to stabilize the market. Bulls have lost their overall near-term technical advantage amid a four-week-old downtrend in place 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 157 7/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at 156 even and then at this week’s low of 155 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls have lost their chart advantage amid a four-week-old downtrend in place. 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 support lies at the overnight low of 128.07.0 and then at this week’s low of 127.31.5. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 128.18.5 and then at 128.24.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer and hit a three-week high in early U.S. trading. Bulls have the overall near-term technical advantage and have momentum on their side. 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 with 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 98.500 and then at 98.750. Shorter-term support is seen at the overnight low of 97.945 and then at 97.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower in early U.S. trading. Prices are still in a four-week-old uptrend on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $57.13 and then at this week’s high of $57.88. Look for sell stops just below technical support at this week’s low of $55.83 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures prices were mostly weaker overnight, with corn losing around 1 cent, soybeans down around 1 cent and wheat 1 to 2 cents lower. Grain traders are awaiting Friday morning’s USDA monthly supply and demand report. Forecasts for the November report show US corn average yield at 167 bushels per acre compared to 168.4 bushels in the last USDA report. US corn production is seen at 13.6 billion bushels compared to 13.779 in last month’s report. US soybean average yield is forecast at 46.6 bushels per acre compared to 46.9 bushels in the last USDA report. US soybean production is seen at 3.51 billion bushels versus 3.55 billion in last month’s report. Grain traders on this day are now not quite so confident the U.S. and China are close to signing a partial trade deal. Now reports are saying there is heavy resistance among some inside the Trump administration to acquiesce to China by rolling back trade tariffs on Chinese imports to the U.S. One Trump trade official late Thursday said there is still no agreement in place and the ultimate decision lies with the mercurial President Trump. Much of this week had seen grain traders more upbeat on notions of a soon-completed “Phase 1” of the U.S.-China trade agreement. Slightly supportive for grain futures prices is the Midwest US weather, which is expected to turn colder and snowy early next week.
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