Friday, October 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight, still
pressured by rising world government bond yields. U.S.
stock indexes are pointed toward narrowly mixed openings
when the New York day session begins. Chinese markets have
been closed all week for a public holiday.
Traders are awaiting this morning’s U.S. Labor Department
Employment Situation Report for September—arguably the most
important U.S. data point of the month. The key non-farm
payrolls number is expected to come in up 180,000. However,
Wednesday’s U.S. ADP national employment report for
September showed a gain of 230,000 jobs, which hints that
Friday’s employment report will come in hotter than
expected, which if is the case would likely further stoke
U.S. bond yields. The U.S. wage-growth figure will also be
closely watched, to see if the annual pace moves above 3.0%,
as it was 2.9% in the August report.
The U.S. Treasury 10-year note yield rose to a seven-year
high above 3.20% this week. Strong U.S. economic data
recently is driving U.S. bond and note prices lower.
The key outside markets today find the U.S. dollar index
firmer. Meantime, November Nymex crude oil prices are
firmer and trading just below $75.00 a barrel.
Other U.S. economic data due for release Friday includes
the international trade report and consumer credit.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly weaker
in early U.S. trading. The bulls have the firm overall near-
term technical advantage, but solid follow-through selling
pressure today, including a bearish weekly low close, would
begin to hint a market top is in place. 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 overnight high
of 2,915.50 and then at Thursday’s high of 2,926.25. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at this week’s
low of 2,887.75 and then at 2,875.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 4.5
December Nasdaq index December futures: Prices are slightly
lower in early U.S. trading. Bulls have the firm overall
near-term technical advantage, but solid follow-through
selling pressure today, including a bearish weekly low
close, would begin to hint a 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 7,540.00 and then at 7,600.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at this week’s low of 7,456.50 and then at
7,400.00. 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 weaker in early U.S.
trading today and not far above Thursday’s contract low.
Bears have the solid overall near-term technical advantage
as an accelerating five-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
Thursday’s high of 138 9/32 and then at 139 even. Buy stops
likely reside just above those levels. Shorter-term support
lies at contract low of 137 8/32 and then at 137 even. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in early U.S.
trading. Bears the solid overall near-term technical
advantage. Prices are in an accelerating five-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 bearish early today. Shorter-term resistance lies at
Thursday’s high of 118.01.0 and then at 118.08.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the contract low of 117.19.5 and
then at 117.16.0. 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 in early
U.S. trading. Bulls have the firm 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 this week’s high of 95.780 and then
at 96.000. Shorter-term support is seen at 95.190 and then
at 95.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
November Nymex crude oil prices are modestly up in early
U.S. trading. 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
bearish early today. Look for buy stops to reside just above
technical resistance at $76.00 and then at the contract high
of $76.90. Look for sell stops just below technical support
at $73.88 and then at this week’s low of $72.95. Wyckoff’s
Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were slightly up overnight. Heavy rains
expected over the U.S. Corn Belt in the coming days will
delay corn and soybean harvest, and that’s friendly for
those market prices. Grain market bulls got some more
bullish news with the new U.S.-Mexico-Canada trade agreement
reached earlier this week. 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
