Tuesday, October 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight on some
risk aversion that has crept back into the marketplace.
U.S. stock indexes are pointed toward lower openings when
the New York day session begins, on some profit taking from
recent gains that pushed prices to record highs. Chinese
markets are closed until Friday for a public holiday.
Worldwide attention, especially in Europe, is on the new
anti-establishment Italian government’s plans to deal with
Italy’s financial and economic problems. The Euro currency
slumped and gold prices rallied overnight after a
government official said Italy would be better off with its
own currency. The European Union has to approve Italy’s
budget plan that many are saying won’t pass muster with the
EU. This matter appears to be escalating and could continue
to pressure the Euro currency and provide more support to
the safe-haven U.S. dollar and gold.
The marketplace is also refocusing on the U.S.-China trade
war. Some market watchers now reckon that with the U.S.
zipping up a trade pact with Mexico and Canada, it will be
that much tougher on China’s economy, as some major
companies’ executives will be re-examining their supply
chains that heretofore have gone through China.
In other overnight news, the Euro zone got a hot inflation
report. The producer price index was reported up 4.2% in
August, year-on-year. The PPI was forecast at up 3.9%.
The key outside markets today find the U.S. dollar index
higher as the greenback bulls have fresh power and
momentum. Meantime, November Nymex crude oil prices hit a
four-year high overnight are near steady and trading just
above $75.00 a barrel.
U.S. economic data due for release Tuesday includes the
weekly Goldman Sachs and Johnson Redbook retail sales
reports, the ISM New York report on business, and domestic
auto industry sales. U.S. Federal Reserve Vice Chairman
Randal Quarles also testifies to the Senate Banking
Committee today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early
U.S. trading on profit taking but are still not far below
the recent contract and record highs. The bulls have the
solid overall near-term technical advantage. The 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 is above the 18-day moving average. Short-term
oscillators (RSI, slow stochastics) are bearish early today.
Today, shorter-term technical resistance comes in at the
overnight high of 2,930.00 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 last
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: 4.5
December Nasdaq index December futures: Prices are lower on
profit taking after hitting a contract and record high on
Monday. Bulls still have the solid 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
bearish early today. Shorter-term technical resistance is
seen at the overnight high of 7,677.75 and then at the
contract high of 7,728.75. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at the overnight low of 7,630.25 and then at 7,600.00.
Sell stops are likely located just below those levels.
Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher in early U.S.
trading today, on short covering. Bears still have the
overall near-term technical advantage as a five-week-old
downtrend is in place on the daily chart. Shorter-term
moving averages (4- 9- 18-day) are neutral early today. The
4-day moving average is even with the 9-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 140 16/32 and
then at 141 even. Buy stops likely reside just above those
levels. Shorter-term support lies at 140 even and then at
the overnight low of 139 27/32. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
5.5
December U.S. T-Notes: Prices are higher in early U.S.
trading, on short covering. Bears have the overall near-
term technical advantage. Prices are in a five-week-old
downtrend on the daily bar chart. Shorter-term moving
averages (4- 9- 18-day) are neutral early today. The 4-day
moving average is above the 9-day. The 9-day is below the
18-day moving average. Oscillators (RSI, slow stochastics)
are bullish early today. Shorter-term resistance lies at
the overnight high of 118.29.5 and then at last week’s high
of 119.00.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 118.19.5 and then at this week’s low of
118.16.5. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher and hit a six-week
high in early U.S. trading. Bulls have regained good upside
momentum and fresh technical power. The shorter-term moving
averages for the dollar index are neutral early today, as
the 4-day is above 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 95.500 and then at
95.750. Shorter-term support is seen at 95.000 and then at
the overnight low of 94.895. Wyckoff’s Intra Day Market
Rating: 6.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady and hit a
contract high and four-year high overnight. 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 neutral to bullish early today. Look for
buy stops to reside just above technical resistance at the
overnight contract high of $75.91 and then at $77.00. Look
for sell stops just below technical support at $75.00 and
then at $74.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were again mixed overnight. Grain
market bulls got some cheer with the new U.S.-Mexico-Canada
trade agreement reached earlier this week. Still, the bears
have the overall near-term technical advantage. But market
bottoms again look to be in place for all three major grain
markets. U.S. corn and soybean harvest pressure is moving
along, but rains have slowed progress, which favors the
bulls.
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
