Thursday, November 9–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. The world stock indexes are seeing normal corrective, profit-taking pullbacks from recent gains that put the indexes at or near record or multi-year highs.
In overnight news, the Euro zone said it sees its annual GDP at up 2.2% in 2017 and at 2.1% in 2018. These numbers are a bit better than the previous GDP forecasts from the EU. The EU sees annual inflation for the bloc at 1.5% this year and at 1.4% in 2018. These numbers are slightly higher from the previous EU inflation forecasts.
U.S. President Trump is in China, as part of his big Asian trip. Reports said Trump and Chinese Premiere Xi are getting along very well, but there were no major breakthroughs on economic or North Korea matters.
Nymex crude oil futures prices are slightly higher and are trading near $57.00 a barrel Thursday morning, after nearby futures hitting a two-year high on Wednesday. However, it is still my bias that Nymex crude won’t be able to sustain prices at or above $60.00 a barrel.
The other key “outside market” on Thursday morning finds the U.S. dollar index slightly lower on a corrective pullback after hitting a nearly four-month high Tuesday. The dollar index remains in a near-term price uptrend.
U.S. economic data due for release Thursday is light and includes the weekly jobless claims report and monthly wholesale trade.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are weaker in early U.S. trading, on mild profit taking after hitting another contract and record high overnight. 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 bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,594.50 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: 4.5
Nasdaq index December futures: Prices are lower in early U.S. trading after hitting another contract and record high overnight. Bulls still 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 to bearish early today. Shorter-term technical resistance is seen at the overnight contract high of 6,351.50 and then at 6,375.00. 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: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls still have 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 154 14/32 and then at this week’s high of 154 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at 153 29/32 and then at this week’s low of 153 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the 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 neutral early today. Shorter-term resistance lies at 125.10.0 and then at this week’s high of 125.15.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.04.0 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is lower on a corrective pullback after hitting a four-month high on Tuesday. A two-month-old uptrend is still in place on the daily bar chart. The shorter-term moving averages for the dollar index are still 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.865 and then at this week’s high of 95.070. Shorter-term support is seen at 94.300 and then at 94.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly higher in early U.S. trading, after hitting a two-year high, basis nearby futures, on Wednesday. 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 57.92 and then at $58.50. Look for sell stops just below technical support at $56.41 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were slightly higher overnight. Traders will closely examine this morning’s monthly USDA supply and demand report. 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.