Wednesday, October 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight. U.S.
stock indexes are poised for weaker openings when the New
York day session begins.
The markets appeared to take in stride another admonishment
to the Federal Reserve from President Trump. Trump Tuesday
afternoon said the Fed is acting too quickly on raising
interest rates, given the low inflationary pressures at
present.
In overnight news, the U.K.’s gross domestic product grew
by 0.7% in the three months ending in July versus the
previous three months.
The key U.S. data point of the day will be the producer
price index report for September, which is expected to come
in at up 0.2% from August.
The outside markets today find the U.S. dollar index
slightly higher. Meantime, November Nymex crude oil prices
are near steady and trading just below $75.00 a barrel.
Hurricane Michael in the U.S. Gulf of Mexico has shut in a
good portion of U.S. oil production in the region.
U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the producer price
index, and monthly wholesale trade inventories.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower
in early U.S. trading. Recent price action hints that at
least 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 Tuesday’s high
of 2,900.00 and then at 2,915.50. Buy stops likely reside
just above those levels. Downside support for active traders
today is located at this week’s low of 2,866.00 and then at
2,850.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are weaker in
early U.S. trading. Recent price action begins to hint a
near-term 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 and 18-day. The 9-day
average is below the 18-day. Short-term oscillators (RSI,
slow stochastics) are neutral to bearish early today.
Shorter-term technical resistance is seen at this week’s
high of 7,455.75 and then at 7,500.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at Tuesday’s low of 7,337.00 and then at
7,300.00. 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 lower in early U.S.
trading today. Bears have the solid overall near-term
technical advantage as a 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 to
bearish early today. Shorter-term technical resistance is
seen at Tuesday’s high of 137 26/32 and then at 138 even.
Buy stops likely reside just above those levels. Shorter-
term support lies at 137 even and then at the contract low
of 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 lower in early U.S.
trading. Bears have the solid overall near-term technical
advantage. Prices are in a 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
bearish early today. Shorter-term resistance lies at this
week’s high of 117.27.5 and then at 118.00.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the 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: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly 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 neutral early today. The dollar index finds shorter-term
technical resistance at this week’s high of 95.840 and then
at 96.000. Shorter-term support is seen at the overnight low
of 95.230 and then at 95.000. Wyckoff’s Intra Day Market
Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady in early
U.S. trading. The bulls have the firm overall near-term
technical advantage. The shorter-term moving averages are
neutral early today as the 4-day is even with the 9-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 this week’s high of $75.28 and then at $76.00.
Look for sell stops just below technical support at the
overnight low of $74.48 and then at $74.00. Wyckoff’s Intra-
Day Market Rating: 5.0
GRAINS
Grain futures prices were steady to weaker overnight.
Traders are awaiting Thursday’s monthly USDA supply and
demand report. While market bottoms look to be in place for
all three major grain markets, the upside is limited by big
U.S. corn and soybean crops being harvested, the U.S.-China
trade war and the surging U.S. dollar index.
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
