Friday, October 11–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Risk appetite is upbeat to end the trading week. The U.S.-China trade talks appeared to have gone well this week in Washington, D.C. President Trump will meet today with China’s Vice Premiere Liu He, signaling at least a partial trade deal is close. News services are also reporting a trade deal between the world’s two largest economies is close at hand.
Also a positive for the marketplace and especially the Europeans are reports the U.K. and European Union are making some progress to avoid a “hard” Brexit that would disrupt European financial markets.
Traders worldwide are taking note of reports Iran says one of its oil tankers was attacked by missiles in the Red Sea, which is close to Saudi Arabia. That helped to push oil prices higher.
Nymex crude oil prices are higher and trading around $54.50 a barrel today. The other key “outside market” sees the U.S. dollar index modestly down in early U.S. trading.
U.S. economic data due for release Friday includes import and export prices, and the University of Michigan consumer sentiment survey. Several Federal Reserve officials are also scheduled to speak today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and hit a nearly two-week high in early U.S. trading. Bulls have gained momentum late this week. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in the overnight high of 2,972.50 and then at 2,985.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,941.75 and then at 2,975.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are higher and hit a two-week high in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,859.00 and then at 7,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,767.00 and then at 7,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker again in early U.S. trading. Bulls have faded this week but still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-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 the overnight high of 162 19/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at 161 16/32 and then at 161 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term support lies at the overnight low of 130.14.5 and then at 130.10.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 130.26.0 and then at 131.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is down and hit a two-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded late this week. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-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 98.450 and then at Thursday’s high of 98.795. Shorter-term support is seen at 98.000 and then at 97.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $55.00 and then at $56.00. Look for sell stops just below technical support at the overnight low of $53.67 and then at $53.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were higher overnight. Corn was up 3 to 4 cents, soybeans up around 9 cents and wheat 2 to 4 cents up. The corn and wheat markets are seeing corrective bounces following strong selling pressure after the release of a bearish USDA report for both markets on Thursday morning. Traders reckoned the US corn crop production would be reduced significantly from the agency’s last report, but it was not. Wheat and corn stockpiles were also forecast at higher-than-expected levels. The soybean data from USDA was seen as neutral to slightly bullish. The grain markets are also seeing buying interest Friday as the U.S.-China trade talks appeared to have gone well this week in Washington, D.C. President Trump will meet today with China’s Vice Premiere Liu He, signaling at least a partial trade deal is close. News services are also reporting a trade deal between the world’s two largest economies is close at hand. Some of the numbers thrown out by news services say the Chinese will agree to buy 30 million metric tons of US soybeans. A major snow storm and cold engulfing the US northern Midwest and Plains states is also bullish as it will end the growing season for crops in those regions. Corn and soybean harvest is already behind due to recent wet weather and the late planting in the springtime. Some wheat has yet to be harvested in the region, too.
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