Friday, September 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S.
stock indexes are pointed toward slightly higher openings
when the New York day session begins. The S&P 500 and Dow
stock indexes are at record highs. There is little risk
aversion in the world marketplace at present.
Goldman Sachs is predicting the U.S.-China trade war will
be extended and will eventually see the U.S. putting
tariffs on all Chinese imports into the U.S. Earlier this
week, Alibaba founder Jack Ma said the U.S.-China trade war
could last many years.
A feature in the marketplace this week has been falling
U.S. Treasury prices (rising yields). The U.S. 10-year T-
Note is presently yielding around 3.07%.
Traders and investors are looking ahead to next week, when
the Federal Reserve’s Open Market Committee (FOMC) meets to
discuss U.S. monetary policy. Many believe the Fed will
make a slight interest rate increase at the meeting.
The key outside markets today find the U.S. dollar index
mildly up on a corrective rebound from this week’s selling
pressure that drove prices to a 2.5-month low on Thursday.
The greenback bears have downside technical momentum to
suggest a market top is in place for the USDX. Meantime,
Nymex crude oil prices are firmer and trading just below
$71.00 a barrel. Around present price levels rallies have
been capped several times this year.
U.S. economic data due for release Friday includes the
flash services purchasing managers index (PMI) and the
flash manufacturing PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher
and hit a contract and record high 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 bullish early today. Today,
shorter-term technical resistance comes in at the overnight
contract high of 2,945.50 and then at 2,950.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at 2,921.75 and then at
Thursday’s low of 2,913.25. Sell stops are likely located
just below those levels. Wyckoff’s Intra-day Market Rating:
6.0
December Nasdaq index December futures: Prices are firmer 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. 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 the overnight high of 7,637.50 and then at 7,650.00.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at 7,550.00 and then at
Thursday’s low of 7,514.00. 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 in early U.S.
trading. Bears have the firm overall near-term technical
advantage as a 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 early today.
Shorter-term technical resistance is seen at the overnight
high of 140 22/32 and then at 141 even. Buy stops likely
reside just above those levels. Shorter-term support lies at
140 even and then at this week’s low of 139 23/32. 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. Bears have the firm overall near-term technical
advantage. Prices are in a 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
bearish early today. Shorter-term resistance lies at the
overnight high of 118.23.5 and then Wednesday’s high of
118.27.0. Buy stops likely reside just above those levels.
Shorter-term technical support lies at this week’s low of
118.14.0 and then at 118.10.0. 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 firmer but did hit a 2.5-
month low in early U.S. trading. The bulls are fading as a
five-week-old downtrend is in place on the daily bar chart,
to suggest a market top is in place. 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 neutral early today. The dollar index finds
shorter-term technical resistance at 94.000 and then at
94.320. Shorter-term support is seen at the overnight low of
93.395 and then at 93.000. Wyckoff’s Intra Day Market
Rating: 5.0
NYMEX CRUDE OIL
November Nymex crude oil prices are firmer and near
Thursday’s contract high in early U.S. trading. The bulls
have the firm 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 bullish early
today. Look for buy stops to reside just above technical
resistance at the contract high of $71.35 and then at
$72.00. Look for sell stops just below technical support at
the overnight low of $70.13 and then at $70.00. Wyckoff’s
Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed overnight. Grain market
bears still have the overall near-term technical advantage
despite solid gains in corn and beans Thursday. If those two
markets can show good follow-through strength today and
produce bullish weekly high closes on a Friday, then near-
term market bottoms would likely be in place. U.S. corn and
soybean harvest pressure is under way, so look for farmer
selling pressure to limit the upside.
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
