Thursday, October 10–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed overnight. The U.S. stock indexes are pointed toward steady to slightly lower openings when the New York day session begins.
Traders and investors are awaiting the latest word coming from the trade talks between the U.S. and China that are taking place in Washington, D.C. Many were surprised that China trade officials even showed up for the negotiations after the U.S. hit China with new sanctions earlier this week. And there is also talk of a limited deal that might be struck between the two nations. As has been the case for many months, the trade talks are very fluid and a tweet from President Trump could change the whole tenor of the situation.
The U.S. data point of the day is the consumer price index report for September, which is expected to come in up 0.1% from August and up 1.8%, year-on-year.
Nymex crude oil prices are near steady and trading around $52.50 a barrel today. The other key “outside market” sees the U.S. dollar index down in early U.S. trading.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and monthly chain store sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Trading has turned choppy recently. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 2,934.25 and then at Tuesday’s high of 2,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,900.00 and then at the overnight low of 2,881.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Wednesday’s high of 7,732.00 and then at this week’s high of 7,799.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,583.25 and then at 7,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading, on some profit taking from recent gains. Bulls still have the solid 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 164 11/32 and then at Wednesday’s high of 164 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at 163 even and then at 162 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term support lies at this week’s low of 131.06.5 and then at 131.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 131.16.0 and then at the overnight high of 131.24.0. 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 down in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 98.795 and then at this week’s high of 98.955. Shorter-term support is seen at the October low of 98.300 and then at 98.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early U.S. trading. Prices are still in a steep near-term downtrend. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $53.00 and then at this week’s high of $54.06. Look for sell stops just below technical support at $52.00 and then at the overnight low of $51.38. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures prices were mixed to firmer in overnight trading. Corn was down around 1/2 cent, soybeans up 1 to 2 cents and wheat around 2 to 3 cents up. Two big events are on deck yet this week: the USDA monthly supply and demand report out Thursday morning and a major snow storm and cold bearing down on the US northern Midwest and Plains states. For the USDA report, US corn production is forecast at around 13.7 billion bushels, with a yield of 167.5 bushels per acre. US soybean production is seen at around 3.58 billion bushels with an average yield of 47.3 bushels per acre. Total US corn ending stocks are estimated at 1.78 billion bushels, soybeans at 0.52 billion bushels and wheat 1.02 billion bushels. Still, there is no solid consensus regarding what the agency will do regarding the size of the US corn and soybean crops, especially after USDA last week made surprising cuts to US corn and soybean stockpiles. The major snowstorm and cold weather forecast to hit the northern plains and northern Corn Belt late Thursday into Saturday 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. This is a bullish element for the grains that could become more significantly bullish in the coming several days.
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