Monday, October 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to firmer overnight. U.S.
stock indexes are pointed toward solidly higher openings
when the New York day session begins. Reports of a U.S.-
Canada trade deal over the weekend have boosted U.S.
equities. Chinese markets are closed until Friday for a
public holiday.
Reports from China on Sunday said the U.S.-China trade war
is taking a toll on China’s manufacturing sector, which has
reduced its overall production. The Caixin manufacturing
purchasing managers index (PMI) fell to 50.0 in September
from 51.0 in August—ending 15 straight months of expansion.
This is leading to speculation China’s monetary officials
could act to stimulate the economy, including devaluing its
currency, the yuan, on the world foreign exchange market.
In other overnight news, the Euro zone jobless rate was
reported at 8.1% in August versus 8.2% in July.
Focus in Europe is still on the new anti-establishment
Italian government’s economic plan to address its fiscal
and financial problems. The Euro currency has been
pressured by this matter, which could be the next flash
point in the currency and financial markets.
The key outside markets today find the U.S. dollar index
slightly lower. Meantime, November Nymex crude oil prices
are slightly higher and trading around $73.50 a barrel.
Nymex crude prices are at contract and eight-month highs.
Brent crude oil futures are at a four-year high.
U.S. economic data due for release Monday includes the U.S.
manufacturing purchasing managers’ index, construction
spending, the ISM report on business manufacturing, and the
global manufacturing PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher and back
near the contract and record highs in early U.S. trading.
The bulls have the solid 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. The 9-day is above the 18-day moving
average. Short-term oscillators (RSI, slow stochastics) are
bullish early today. Today, shorter-term technical
resistance comes in at the contract high of 2,947.00 and
then at 2,960.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at the overnight low of 2,922.50 and then at last week’s low
of 2,907.50. Sell stops are likely located just below those
levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index December futures: Prices are higher
and near the contract and record high in early U.S. trading.
Bulls 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 bullish early today.
Shorter-term technical resistance is seen at the contract
high of 7,723.50 and then at 7,750.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at the overnight low of 7,670.75 and then at
7,650.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower and near the recent
four-month low in early U.S. trading Monday. Bears 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 above 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 140 even and then at
the overnight high of 140 11/32. Buy stops likely reside
just above those levels. Shorter-term support lies at the
overnight low of 139 24/32 and then at the September low of
139 17/32. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower and not far above
the recent four-month low. 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 118.23.5 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 118.16.5 and then at the September low of
118.11.0. 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. A five-week-old downtrend on the daily bar
chart was soundly negated late last week. 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 neutral to bullish early today. The
dollar index finds shorter-term technical resistance at last
week’s high of 94.985 and then at the September high of
95.280. Shorter-term support is seen at the 94.550 and then
at 94.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are firmer and not far below
Friday’s contract high 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 bullish early today. Look for
buy stops to reside just above technical resistance at the
contract high of $71.73 and then at $72.00. Look for sell
stops just below technical support at $73.00 and then at
$72.50. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were narrowly mixed overnight. Grain
market bears have the overall near-term technical advantage
and gained some downside technical momentum late last week.
U.S. corn and soybean harvest pressure is progressing, 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
