Wednesday, October 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed overnight. U.S. stock
indexes are pointed toward weaker openings when the New
York day session begins, on corrective pullbacks from
Tuesday’s strong gains that began to repair the recent
serious chart damage. Daily volatility is still elevated
compared to recent weeks and months.
The rift between the U.S. and Saudi Arabia regarding a
missing Saudi journalist who many think was killed by the
Saudi Kingdom remains near the front burner of the
marketplace. The U.S. Secretary of State was in Saudi
Arabia talking to the king and now is in Turkey to see its
president. According to news reports, the Saudi king could
be caught up in a cover-up of the reporter’s murder.
President Trump said there would be “severe punishment” of
the Saudi Kingdom if it is determined it was complicit in
the death of the journalist. There is a lot at stake for
both sides.
The U.S. economic highlight at mid-week will be the
afternoon release of the minutes from the Federal Reserve’s
FOMC meeting that was held in late-September. Traders and
investors will parse the report for clues on futures
direction and timing of U.S. monetary policy, and also
focus on comments on the U.S. economy and inflation.
The key outside markets today find the U.S. dollar index
slightly higher. Meantime, November Nymex crude oil prices
lower and trading just around $71.50 a barrel.
U.S. economic data due for release Wednesday includes the
FOMC minutes, the weekly MBA mortgage applications survey,
new residential construction and the weekly DOE liquid
energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early
U.S. trading, on a downside correction from Tuesday’s strong
gains that began to repair the recent serious chart damage.
Recent price action still suggests that at least a near-term
market top is in place, if not a major top. 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 2,824.25 and then at 2,850.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at 2,800.00 and then at
2,775.00. 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 in
early U.S. trading, on a corrective pullback from Tuesday’s
strong gains. Recent price action still strongly suggests a
near-term market top is in place, if not a major market top.
Shorter-term moving averages (4- 9-and 18-day) are still
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 bullish early today. Shorter-term technical resistance is
seen at the overnight high of 7,368.50 and then at 7,400.00.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at 7,300.00 and then at
7,250.00. 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. 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 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
bullish early today. Shorter-term technical resistance is
seen at the overnight high of 138 18/32 and then at last
week’s high of 138 31/32. Buy stops likely reside just above
those levels. Shorter-term support lies at this week’s low
of 138 even and then at 137 23/32. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
4.5
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 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
early today. Shorter-term resistance lies at the overnight
high of 118.06.5 and then at this week’s high of 118.10.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at 118.00.0 and then at
117.28.0. 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 firmer in early U.S.
trading. Bulls have the overall near-term technical
advantage. The shorter-term moving averages for the dollar
index are neutral early today, as the 4-day is below the 9-
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 95.060 and then at 95.470.
Shorter-term support is seen at this week’s low of 94.470
and then at 94.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
November Nymex crude oil prices are lower in early U.S.
trading. Recent strong selling pressure still 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 bearish
early today. Look for buy stops to reside just above
technical resistance at the overnight high of $72.43 and
then at this week’s high of $72.70. Look for sell stops just
below technical support at last week’s low of $70.51 and
then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were narrowly mixed overnight. Not much
new this week. 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. Harvest will
pick up speed in the Corn Belt now that fields are drying
out from the recent heavy rains. My bias is still for choppy
and sideways-to-higher price action into the end of this
year.
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
