Wednesday, November 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were near steady to mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. There are now perceptions U.S. tax reform legislation could get bogged down in the U.S. Congress. That’s a minor negative for stock markets worldwide, and a minor positive for gold and silver.
Gold prices are firmer Wednesday on some short covering and safe-haven demand. A power shake-up in Saudi Arabia last weekend and an attempted missile strike on Saudi Arabia from Iran-backed terrorists has injected some anxiety into the world marketplace.
Nymex crude oil futures prices are slightly lower and are just above $57.00 a barrel after hitting a two-year high on Tuesday. It will be very tough for Nymex crude to sustain prices at or above $60.00 a barrel.
Meantime, the other key “outside market” finds the U.S. dollar index slightly lower after hitting a nearly four-month high on Tuesday.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting another contract and record high on Tuesday. Bulls have the solid overall near-term technical advantage and there are still no strong, early technical clues that a market top is close at hand. 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,593.50 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,575.50 and then at last week’s low of 2,562.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly lower in early U.S. trading after hitting another contract and record high on Tuesday. Bulls have the solid technical advantage. 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 early today. Shorter-term technical resistance is seen at the overnight contract high of 6,331.50 and then at 6,350.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 6,296.25 and then at this week’s low of 6,268.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are steady on a pause after hitting a five-week high on Tuesday. Bulls have regained the slight overall near-term technical advantage. 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 155 even and then at 155 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 14/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are steady in early U.S. trading. Bears have the overall near-term technical advantage but the bulls still have some momentum. 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 125.15.0 and then at 125.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.11.5 and then at Tuesday’s low of 125.06.0. 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 lower on a corrective pullback after hitting a four-month high on Tuesday. A two-month-old uptrend is in place on the daily bar chart. The shorter-term moving averages for the dollar index are bullish early today as the 4-day is above 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 to bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 95.070 and then at 95.250. Shorter-term support is seen at this week’s low of 94.600 and then at 94.300. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly lower on normal profit taking after hitting a two-year high, basis nearby futures, on Tuesday. Bulls still have the firm overall near-term technical advantage amid a near-term price uptrend being in place. Look for buy stops to reside just above technical resistance at this week’s high of 57.69 and then at $58.00. Look for sell stops just below technical support at $56.50 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were mixed overnight. Harvest in the U.S. Corn Belt is winding up. Focus has switched to world supply and demand fundamentals. Recent price action in the grains still hints at market bottoms in place. The recent rally in oil prices will give the grain bulls some momentum, too.