Wednesday, September 26–Jim Wyckoff’s Morning Markets
Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to mostly firmer overnight.
U.S. stock indexes are also pointed toward firmer openings
when the New York day session begins.
Traders and investors are awaiting the conclusion of the
two-day FOMC meeting that began Tuesday morning and ends
Wednesday afternoon with a statement. The FOMC is widely
expected to slightly raise U.S. interest rates at this
meeting, marking the third rate rise this year. Fed
Chairman Jerome Powell will also hold a press conference
after the meeting. As usual, the marketplace will parse the
Fed’s and Powell’s wording for clues on the pace of future
Fed rate hikes and the Fed’s inflation expectations.
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 key outside markets today find the U.S. dollar index
slightly higher. Meantime, November Nymex crude oil prices
slightly lower and trading just above $72.00 a barrel.
Supply worries have boosted oil recently. U.S. sanctions
against Iran begin in early November, which will likely
take much of that country’s oil off the world market.
President Trump has singled out Iran in front of the United
Nations this week as being a terrorist state that needs
heavy economic sanctions. Trump also called out the OPEC
oil cartel for holding prices artificially high, saying
OPEC countries may not get financial or military support
from the U.S.
Other U.S. economic data due for release today includes the
weekly MBA mortgage applications survey, new residential
sales and the weekly DOE liquid energy stocks report.
–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 early today. Today,
shorter-term technical resistance comes in at this week’s
high of 2,934.25 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 2,917.75 and then at 2,900.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 6.0
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 neutral early today. The 4-day moving average is
above the 9-day and 18-day. The 9-day average is even with
the 18-day. Short-term oscillators (RSI, slow stochastics)
are bullish early today. Shorter-term technical resistance
is seen at last week’s high of 7,637.50 and then at
7,675.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the overnight
low of 7,596.25 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 higher on short covering
after hitting a four-month low on Tuesday. Bears have the
firm overall near-term technical advantage as a steep 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 neutral to bullish early today.
Shorter-term technical resistance is seen at this week’s
high of 140 16/32 and then at 141 even. Buy stops likely
reside just above those levels. Shorter-term support lies at
the overnight low of 139 27/32 and then at this week’s low
of 139 17/32. Sell stops likely reside just below those
levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer on short covering
after hitting a four-month low on Tuesday. Bears have the
firm overall near-term technical advantage. Prices are in a
steep 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 this week’s
high of 118.23.0 and then at 118.27.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 118.14.0 and then at
this week’s low of 118.11.0. 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 slightly higher in early
U.S. trading. The bulls have faded recently and a five-week-
old downtrend is 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 94.000 and then at 94.320. Shorter-term
support is seen at last week’s low of 93.395 and then at
93.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower but not
far below Tuesday’s contract high in early U.S. trading. The
bulls have the solid overall near-term technical advantage,
but it’s at present price levels that rallies this year have
petered out. 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 neutral 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 $71.83 and then at $71.00. Wyckoff’s
Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were firmer 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 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
