Tuesday, October 30–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed to mostly lower overnight.
U.S. stock indexes are pointed toward higher openings when
the New York day session begins, on an upside correction
following Monday’s sell off that pushed the indexes to six-
month lows. There is still strong near-term technical
evidence the U.S. stock indexes have put in market tops.
Reports Monday afternoon said the Trump administration will
impose tariffs on all Chinese goods imported into the U.S.,
if the meeting between Presidents Trump and Xi Jinpin in
Argentina in late November do not produce results. This news
helped sink the U.S. stock market Monday afternoon.
In overnight news, the Euro zone reported its latest
quarterly gross domestic product rose only a paltry 0.6% in
the third quarter, year-on-year. That compares to the latest
U.S. GDP third-quarter growth rate of 3.5%.
The key outside markets today find the U.S. dollar index
higher and setting a new for-the-move high overnight.
Meantime, November Nymex crude oil prices are lower and
trading around $66.50 a barrel.
The key U.S. economic data point of the week, if not the
month, will be Friday’s November employment report from the
Labor Department.
U.S. economic data due for release Tuesday includes the
weekly Goldman Sachs and Johnson Redbook retail sales
reports, the S&P/Case-Shiller home price indexes, and the
consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early
U.S. trading, on a corrective bounce after hitting a six-
month low on Monday. Recent price action suggests a market
top is in place. Prices are in a steep three-week-old
downtrend on the daily bar chart. 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 neutral to bullish early today. Today,
shorter-term technical resistance comes in at the overnight
high of 2,664.25 and then at 2,700.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at the overnight low of 2,636.25
and then at Monday’s low of 2,603.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.5
December Nasdaq index December futures: Prices are higher in
early U.S. trading, on a corrective bounce after hitting a
six-month low on Monday. Recent price action suggests a
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. The 9-day average is below the
18-day. Short-term oscillators (RSI, slow stochastics) are
neutral early today. Shorter-term technical resistance is
seen at 6,800.00 and then at 6,900.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at the overnight low of 6,702.25 and then at
6,600.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower on a corrective
pullback after hitting a three-week high on Monday. A
fledgling price uptrend is still in place on the daily bar
chart. Shorter-term moving averages (4- 9- 18-day) are
bullish early today. The 4-day moving average is above the
9-day and 18-day. The 9-day is above the 18-day moving
average. Oscillators (RSI, slow stochastics) are neutral to
bearish early today. Shorter-term technical resistance is
seen at the overnight high of 139 12/32 and then at Monday’s
high of 139 28/32. Buy stops likely reside just above those
levels. Shorter-term support lies at the overnight low of
138 23/32 and then at 138 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, on a corrective pullback from recent good gains. A
fledgling uptrend is still in place on the daily bar chart.
Shorter-term moving averages (4- 9- 18-day) are bullish
early today. The 4-day moving average is above the 9-day
and 18-day. The 9-day is above the 18-day moving average.
Oscillators (RSI, slow stochastics) are neutral to bearish
early today. Shorter-term resistance lies at 119.00.0 and
then at last week’s high of 119.06.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 118.21.5 and then at
118.16.0. 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 higher and hit a contract
high overnight. 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. 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 the overnight high of 96.665 and
then at 97.000. Shorter-term support is seen at the
overnight low of 96.395 and then at 96.000. Wyckoff’s Intra
Day Market Rating: 6.5
NYMEX CRUDE OIL
December Nymex crude oil prices are lower in early U.S.
trading. Recent strong selling pressure suggests this market
has topped out. The shorter-term moving averages are bearish
early today as the 4-day is below the 9-day and 18-day. The
9-day is below 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 the overnight high of $67.26 and
then at Monday’s high of $67.95. Look for sell stops just
below technical support at the October low of $65.74 and
then at $65.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were higher overnight on more short
covering. The grain market bears still have the overall
near-term technical advantage, even though it still appears
harvest lows are in place. The upside will continue to be
limited in the next few weeks by big U.S. corn and soybean
crops being harvested, and tepid world demand for U.S.
wheat. Any progress on the U.S.-China trade war front would
be bullish for the grains.
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
