Thursday, September 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock
indexes are pointed toward firmer openings when the New
York day session begins.
Traders are still digesting this week’s Federal Open Market
Committee (FOMC) meeting that saw the Fed on Wednesday
afternoon slightly raise U.S. interest rates, by 0.25%, to a
range of 2.0% to 2.25%. The move was expected and marks the
third rate rise this year. The FOMC removed the word
“accommodative” from its statement, which suggested to some
the U.S. central bank is moving closer to the end of the
current rate-hike cycle. The Fed is now on pace to raise
rates another quarter-point this year and then three times
in 2019. The Federal Reserve officials said long-term U.S.
inflation prospects remain unchanged and non-problematic
despite the recent strong U.S. economic growth. Fed Chairman
Jerome Powell held a press conference after the FOMC
statement. He said the U.S. economy is in a good place right
now, but added the Fed’s monetary policy is still leaning to
the accommodative side.
Veteran market watchers reckon the Fed cannot keep
tightening U.S. monetary policy by raising interest rates
while at the same time see the U.S. economy growing so
strongly–and without igniting inflation fears. President
Trump has already weighed in on the matter and has
admonished the Fed for raising interest rates.
Meantime, China-U.S. relations continue to sour, as Trump
on Wednesday accused China of meddling in the upcoming U.S.
elections.
Focus in Europe is now on the new Italian government’s
economic plans to address its fiscal and financial
problems, which are required by European Union law. Many
believe Italian lawmakers won’t comply with EU rules on the
matter. The Euro currency is pressured today on reports
Italy will delay its fiscal and economic projections.
The key outside markets today find the U.S. dollar index
higher on an upside correction from recent selling
pressure. Meantime, November Nymex crude oil prices are
higher and trading around $72.50 a barrel.
U.S. economic data due for release Thursday includes the
weekly jobless claims report, durable goods orders, pending
home sales, the Kansas City Fed manufacturing survey, and
the third estimate of second-quarter gross domestic
product.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher
in early U.S. trading. The bulls have the firm 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 to bearish early today.
Today, shorter-term technical resistance comes in at this
week’s high of 2,936.00 and then at the contract high of
2,947.00. Buy stops likely reside just above those levels.
Downside support for active traders today is located at this
week’s low of 2,907.50 and then at 2,900.00. Sell stops are
likely located just below those levels. Wyckoff’s Intra-day
Market Rating: 5.5
December Nasdaq index December futures: Prices are up in
early U.S. trading. Bulls have the firm overall near-term
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 and 18-day. The 9-day average is above the
18-day. Short-term oscillators (RSI, slow stochastics) are
bullish early today. Shorter-term technical resistance is
seen at this week’s high of 7,668.00 and then at 7,700.00.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
7,586.00 and then at 7,550.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-Day Market Rating:
6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer on more short
covering after hitting a four-month low on Tuesday. Bears
still have the overall near-term technical advantage as a
four-week-old downtrend is in place on the daily chart.
Shorter-term moving averages (4- 9- 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.
Oscillators (RSI, slow stochastics) are bullish early today.
Shorter-term technical resistance is seen at the overnight
high of 141 3/32 and then at 141 16/32. Buy stops likely
reside just above those levels. Shorter-term support lies at
the overnight low of 140 17/32 and then at 140 even. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly higher on more
short covering after hitting a four-month low on Tuesday.
Bears still have the overall near-term technical advantage.
Prices are in a four-week-old downtrend 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 and 18-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are neutral to
bullish early today. Shorter-term resistance lies at the
overnight high of 118.31.5 and then at 119.08.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at 118.20.0 and then at 118.16.0.
Sell stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is higher in early U.S.
trading. A five-week-old downtrend is still in place on the
daily bar chart. The shorter-term moving averages for the
dollar index 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 for the dollar index are
bullish early today. The dollar index finds shorter-term
technical resistance at the overnight high of 94.260 and
then at 94.500. Shorter-term support is seen at the
overnight low of 93.810 and then at last week’s low of
93.395. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are higher and not far below
Tuesday’s contract high in early U.S. trading. The bulls
have the solid overall near-term technical advantage. The
shorter-term moving averages 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 (RSI and slow
stochastics) are bullish early today. Look for buy stops to
reside just above technical resistance at the contract high
of $72.78 and then at $73.00. Look for sell stops just below
technical support at the overnight low of $71.97 and then at
this week’s low of $71.14. Wyckoff’s Intra-Day Market
Rating: 6.0
GRAINS
Grain futures prices were lower overnight. Grain market
bears still have the overall near-term technical advantage,
but corn and soybean prices look like they have bottomed
out. U.S. corn and soybean harvest pressure is under way at
full speed, so look for farmer selling pressure to limit the
upside. Traders are awaiting Friday’s USDA quarterly grain
stocks projections.
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
