* LATEST MARKET DEVELOPMENTS *
The Armistice and Veterans Day holidays in Europe and the U.S. Monday have squelched market activity. The U.S. government is closed on Monday and no U.S. economic data is due for release.
The market place is still digesting Friday’s U.S. employment report for October, which showed a surprisingly larger-than-expected 204,000 rise in non-farm payroll employment. That number was expected to have grown by only around 120,000. The jobs report fell into the camp of U.S. monetary policy hawks who want to see the Fed start to “taper” its monetary policy sooner rather than later. This week’s U.S. economic data will give traders and investors more guidance on the present health of the U.S. economy and just when the Fed might start to wind down its monthly bond-buying program.
The next Federal Open Market Committee (FOMC) monetary policy meeting is held in December.Last week’s U.S. economic data gave the U.S. dollar a boost against its other currency rivals. The U.S. dollar index hit a nearly two-month high last week. The stronger greenback is a bearish underlying factor for the raw commodity sector. That sector continues to be in an overall bear market.
Reports overnight said China’s industrial production data, released during the weekend, showed a 10.3% rise in October, year-on-year. Consumer inflation in China was reported up 3.2% in October, on an annual basis. This economic data is an underlying bullish factor for the raw commodity sector, as it suggests the world’s second-largest economy and a voracious raw commodity importer is on a healthy economic growth path.
Monday’s Wyckoff’s Daily Risk Rating: 5.0 (Monday setting up to be a quiet and uneventful trading day, amid the U.S. holiday.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off). Each morning I will look at several markets and scan the world’s news headlines to get a sense of how risk appetite in the market place will shape for the trading day. For example, extreme readings in my Daily Risk Rating would be a very bullish U.S. jobs report that would fully cheer investors—Wyckoff’s Daily Risk Rating would be 1. Conversely, a daily rating of 10 would be an unexpected military confrontation in the Middle East that included combat. Most days Wyckoff’s Daily Risk Rating will be around neutral–between 4 and 6.) –Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady in early U.S. trading. 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 neutral early today. Today, shorter-term technical resistance comes in at last week’s record high of 1,774.20 and then at 1,785.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,750.00 and then at last week’s low of 1,736.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are slightly lower early today. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at 3,375.00 and then at 3,387.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,350.00 and then at 3,325.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Dow futures: Prices are slightly higher early today. Buy stops likely reside just above technical resistance at last week’s record high of 15,745 and then at 15,800. Sell stops likely reside just below technical support at 15,650 and then at 15,600. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower early today and hit a fresh two-month low overnight. Friday’s stronger U.S. jobs report sunk the bond market. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 131 24/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 16/32 and then at 131 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are near steady early today and hovering near a four-week low. 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 the overnight high of 126.08.5 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 125.30.5 and then at 125.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is weaker early today, on a corrective pullback from recent strong gains. Bulls still have some more upside momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.420 and then at last week’s high of 81.580. Shorter-term support is seen at 81.000 and then at Friday’s low of 80.790. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
December Nymex crude oil prices are weaker early today and hovering not far above last week’s four-month low. Bears still have the overall near-term technical advantage. Prices are in a 10-week-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at last week’s high of $95.40. Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were mixed overnight. Friday’s USDA monthly supply and demand report did not turn out to be the bearish report that many grain traders had reckoned it would be. The upside price action in corn and soybeans Friday begins to hint that seasonal harvest lows are in place. That’s also my bias, especially for corn. With the U.S. corn and soybean harvest winding down, focus of grain market traders will turn from U.S. production to overall worldwide demand for grains, and on the upcoming South American planting and growing season.
