Monday, October 29–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed to mostly firmer overnight.
U.S. stock indexes are pointed toward higher openings when
the New York day session begins. European stock indexes were
mostly up, following news that the S&P Global Ratings agency
on Friday did not downgrade Italy’s debt rating. China’s
stock market suffered more losses Monday amid investor
worries about the world’s second-largest economy.
U.S. stock indexes on Friday fell to six-month lows before
posting rebounds on the day. Stock market bulls will be glad
to get the historically turbulent month of October out of
the say and hopefully get a “Santa Claus rally” this year.
In overnight news, German Chancellor Angela Merkel has
announced she will step down as leader of her Christian
Democratic party after disappointing election results.
Europe market watchers say that’s a sign of Merkel’s decline
in power in Germany and in the European Union.
The key outside markets today find the U.S. dollar index
higher and hovering near Friday’s nine-week high. Meantime,
November Nymex crude oil prices are weaker and trading
around $67.50 a barrel.
The key U.S. economic data point of the week, if not the
month, will be Friday’s November employment report from the
Labor Department.
U.S. economic data due for release Monday includes personal
income and outlays and the Texas manufacturing outlook
survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early
U.S. trading, on a corrective bounce after hitting a six-
month low on Friday. Recent price action still suggests that
a market top is in place. Prices are in a steep three-week-
old downtrend on the daily bar chart. The shorter-term
moving averages (4-, 9- and 18-day) are bearish early today.
The 4-day moving average is below the 9-day. The 9-day is
below the 18-day moving average. Short-term oscillators
(RSI, slow stochastics) are neutral to bullish early today.
Today, shorter-term technical resistance comes in at
2,700.00 and then at 2,712.25. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at the overnight low of 2,660.00 and then
at 2,650.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index December futures: Prices are higher in
early U.S. trading, on a corrective bounce after hitting a
six-month low on Friday. Recent price action suggests a
market top is in place. Shorter-term moving averages (4- 9-
and 18-day) are bearish early today. The 4-day moving
average is below 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 7,000.00 and then at 7,075.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
6,880.00 and then at 6,800.00. 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 lower after hitting a
three-week high overnight. A fledgling price uptrend is in
place on the daily bar chart. 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 139 28/32 and
then at 140 even. Buy stops likely reside just above those
levels. Shorter-term support lies at 139 even and then at
Friday’s low of 138 28/32. Sell stops likely reside just
below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are lower in early U.S.
trading, on a corrective pullback from recent good gains. A
fledgling uptrend is in place on the daily bar chart.
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 119.00.0 and then at
last week’s high of 119.06.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
Friday’s low of 118.21.5 and then at 118.16.0. Sell stops
likely reside just below those levels. Wyckoff’s Intra-Day
Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly firmer after
hitting a contract high on Friday. Bulls have the solid
overall near-term technical advantage. The shorter-term
moving averages for the dollar index are bullish early
today, as the 4-day is above the 9-day. The 9-day is above
the 18-day moving average. Short-term oscillators for the
dollar index are neutral early today. The dollar index finds
shorter-term technical resistance at the overnight high of
96.440 and then at Friday’s contract high of 96.620.
Shorter-term support is seen at 96.000 and then at 95.665.
Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
December Nymex crude oil prices are weaker in early U.S.
trading. Recent strong selling pressure suggests this market
has topped out. 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 the overnight high of $67.95 and then at
$68.50. Look for sell stops just below technical support at
the overnight low of $66.93 and then at last week’s low of
$65.74. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were higher overnight on short
covering. The grain market bears still have the overall
near-term technical advantage, even though it still appears
harvest lows are in place. The upside will continue to be
limited in the next few weeks by big U.S. corn and soybean
crops being harvested, and tepid world demand for U.S.
wheat.
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
