Monday, October 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight, with steep
losses seen in the Chinese stock market after it was closed
last week for a public holiday. Chinese monetary officials
during the weekend loosened monetary policy a bit more but
that did not stop their stock market sell off.
World equities are still pressured by rising government
bond yields that are pulling investor interest away from
stocks. U.S. stock indexes are in very mature bull market
runs that have many wondering if the end is near. U.S.
stock indexes are pointed toward weaker openings when the
New York day session begins. The U.S. government, including
the Treasury bond cash market, is closed for the Columbus
Day holiday today.
Risk-off attitudes to start the trading week are also being
perpetuated by the new Italian anti-establishment government
not falling into line with European Union rules on a budget.
The key outside markets today find the U.S. dollar index
higher, on safe-haven demand. Meantime, November Nymex
crude oil prices are lower on profit taking and trading
around $73.50 a barrel.
U.S. economic data due for release Monday is light and
includes the employment trends index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early
U.S. trading. The bulls have the overall near-term technical
advantage, but Friday’s bearish weekly low close begins to
hint a near-term market top is in place. 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 bearish early today. Today,
shorter-term technical resistance comes in at overnight high
of 2,898.25 and then at Friday’s high of 2,915.50. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at last week’s low of
2,873.25 and then at 2,860.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-day Market Rating:
4.0
December Nasdaq index December futures: Prices are lower in
early U.S. trading. Bulls have the overall near-term
technical advantage, but Friday’s bearish weekly low close
begins to hint a near-term market top is in place. Shorter-
term moving averages (4- 9-and 18-day) are neutral early
today. The 4-day moving average is below the 9-day. The 9-
day average is above the 18-day. Short-term oscillators
(RSI, slow stochastics) are bearish early today. Shorter-
term technical resistance is seen at the overnight high of
7,453.25 and then at 7,500.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at last week’s low of 7,347.00 and then at 7,300.00.
Sell stops are likely located just below those levels.
Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S.
trading today and hit a contract low overnight. Bears have
the solid overall near-term technical advantage as an
accelerating six-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. 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 138 even and
then at 138 9/32. Buy stops likely reside just above those
levels. Shorter-term support lies at the overnight contract
low of 136 21/32 and then at 136 16/32. Sell stops likely
reside just below those levels. Wyckoff’s Intra-Day Market
Rating: 4.0
December U.S. T-Notes: Prices are firmer in early U.S.
trading, on short covering after hitting a contract low
overnight. Bears still have the solid overall near-term
technical advantage. Prices are in an accelerating six-
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. 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 118.00.0 and then at 118.08.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight contract low of
117.13.5 and then at 117.08.0. 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. 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 and 18-day. The 9-day is above 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 last week’s high of 95.780 and then
at 96.000. Shorter-term support is seen at the overnight low
of 95.260 and then at 95.000. Wyckoff’s Intra Day Market
Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S.
trading, on profit taking from recent gains. The bulls still
have the firm 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 bearish early today. Look for buy stops to
reside just above technical resistance at $74.00 and then at
the overnight high of $74.58. Look for sell stops just below
technical support at $73.00 and then at $72.50. Wyckoff’s
Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were lower overnight. Heavy rains in
much of the U.S. Corn Belt recently and more in the coming
days will delay corn and soybean harvest, and that will
limit the downside in corn and beans. Market bottoms look to
be in place for all three major grain markets.
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
