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Tuesday,
Oct. 12—Jim Wyckoff’s Daily Markets Update
© 2002 by Jim Wyckoff Enterprises. It is a violation of
international law to redistribute any part of this proprietary
content in any form without expressed permission from Jim
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I will vigorously pursue any and all violators of my copyrights
— and they will be prosecuted.Dear Valued Subscriber:
Following are today’s significant developments in the U.S.
futures markets.
LIVESTOCK:
December live cattle closed up $0.05 at $88.72 today. Prices
hit a fresh four-week high today and then backed off to close
near the session low. Sharp losses in the hog futures limited
buying interest in the cattle. Cattle futures prices are still
in a wide trading range on the daily bar chart. A close below
the September low of $85.35 would provide the bears with some
solid downside power. A close above the September high of
$89.55 would provide the bulls with fresh, solid upside power.
First resistance is seen at $89.00 and then at $89.55. First
support is seen at $88.30--this week's low--and then at $88.00.
Wyckoff's Market Rating: 5.0.
November
feeder cattle closed up $1.00 at $113.00 today. Prices gapped
higher on the daily bar chart and hit a fresh contract high
today, but did back off the high by the close. Weaker corn
prices fueled the feeder bulls today.
Bulls have the firm technical advantage, and gained more power
today. However, if the live cattle futures can't make headway
and struggle, then the feeders will also struggle at higher
levels, too. First resistance is seen at $113.50--today's
contract high--and then at $114.00. First support is seen
at $112.75--today's low--and then at $112.20. Wyckoff's Market
Rating: 8.0.
December
lean hogs closed down the $2.00 limit at $64.30 today. Prices
hit a fresh five-week low today on good commodity fund selling
pressure and on weaker cash hog prices. Chart damage was inflicted
today and odds increased that a near-term top is in place
and that prices will trend sideways to lower for the near
term, or longer. The next major downside objective for the
bears is the August low of $60.40. First resistance is seen
at $65.00 and then at $66.00--today's high. First support
is seen at $64.00 and then at $63.00. Wyckoff's Market Rating:
4.0.
(A
while back I did buy a put option on December lean hogs. The
strike price is $60.00 and I paid $1.90 ($760.00) for the
option, which expires in early December.)
February
pork bellies closed down $1.30 at $94.20 today. Prices scored
a bearish "outside day" down on the daily bar chart
today, and closed near the session low. Prices also closed
at a fresh four-week low close today. More near-term chart
damage was inflicted today and the bears have the solid technical
advantage. First support is seen at $94.00 and then at $93.00.
First resistance is seen at $95.00 and then at $96.20--today's
high. Wyckoff's market Rating: 3.0.
GRAINS:
December corn futures closed down 2 1/4 cents at $2.02 1/2
today. What an interesting day in this market! USDA came out
with a shocking and extremely bearish U.S. crop production
figure of 11.6 billion bushels. That's way above the expectations
of traders and is about 10% bigger than last month's USDA
estimate. It was also the biggest one-month USDA revision
to corn crop production in memory. Dec. corn gapped lower
on the opening and set a fresh contract low of $1.97. However,
the bears could not press their case farther and prices filled
the gap and closed near the session high. Today's price action
on the daily bar chart does show the potential for a selling
"exhaustion tail" forming--whereby selling interest
dries up at lower price levels and prices move back higher.
If there is some follow-through buying interest on Wednesday,
then that exhaustion tail would be confirmed. A close below
today's contract low, which is now strong support, would open
the door to more solid downside selling pressure in the near
term. Thus, price action the rest of this week will be extra
important for the market. First resistance is seen at $2.04
1/2--today's high--and then at $2.06 1/4--this week's high.
First support is seen at $2.02 1/2 and then at $2.00. Wyckoff's
Market Rating: 1.5.
November
soybeans closed down 26 cents at $5.13 today. Prices gapped
lower on the daily bar chart and set a fresh 17-month low
today. Prices did close off the session low. A bearish USDA
report that showed a record-setting U.S. soybean crop above
3 billion bushels sunk the futures today. Prices today did
see a bearish downside "breakout" from a sideways
trading pattern on the daily bar chart. A close below today's
low of $5.06 would open the door to even further downside
pressure this fall. Trading this week will be extra important
for both the bulls and bears. If bulls can hold prices above
today's low this week, then they would gain a bit of momentum
to at least hold prices in a sideways pattern. The latest
commitments of traders report shows that the "commodity
funds" hold a record net short position in soybean futures.
To some, that suggests the extreme bearishness of the market.
However, to me it also suggests all of those fund shorts in
the soybean market will have to buy back those positions at
some point.
First resistance for Nov. beans is seen at 5.17--today's high--and
then at $5.25. First support is seen at $5.06--today's low--and
then at $5.00. Wyckoff's Market rating: 1.0.
(***Last
week I did buy a call option on March soybean futures. The
strike price is $5.80 and I paid 17 cents ($850) for the option,
which expires in late February.)
December
soybean meal closed down $7.90 at $155.40 today. Prices gapped
lower on the daily bar chart and did hit a fresh 17-month
low today. However, prices did close well off the low. Trading
the rest of this week will be extra important. See soybean
comments above. Bears are in firm technical command. First
resistance comes in at $156.50--today's high--and then at
$158.80. First support is seen at $153.40--today's low--and
then at $152.50. Wyckoff's market Rating: 1.0.
December
bean oil closed down 97 points at 19.98 cents today. Prices
gapped lower on the daily bar chart today and hit a fresh
13-month low. Prices did close off the session low today.
Price action the rest of this week will be extra important
for the bulls and the bears. Right now, the door is opened
to more serious downside potential this fall. First resistance
is seen at 20.19 cents--today's high--and then at 20.50 cents.
First support is seen at 19.80 cents--today's low--and then
at 19.50 cents. Wyckoff's Market Rating: 1.0.
December
Chicago SRW wheat closed up 8 cents at $3.11 today. Today's
USDA report was deemed bullish for wheat, but prices were
pulled lower early on, and hit a fresh contract low of $2.97,
on the sharp losses in the corn and soybean pits. But then
wheat turned around and put in a strong performance to close
near the session high. Prices also scored a bullish "outside
day" up on the daily bar chart today. If there is good
follow-through buying strength on Wednesday, then a bullish
"key reversal" up would be confirmed on the daily
bar chart, and that would be an early clue that a low is finally
in place in this market. First resistance is seen at $3.12
1/2 and then at $3.15. First support lies at $3.05 and then
at $3.00. Wyckoff's Market Rating: 2.0.
December
K.C. HRW wheat closed up 5 3/4 cents at $3.39 3/4 today. Prices
scored a bullish "outside day" up on the daily bar
chart today and closed near the session high, on the bullish
USDA data. Good follow-through strength this week would be
a solid clue that a near-term low is in place. The bears still
have technical control, however. First resistance is seen
at $3.41 1/2--today's high--and then at $3.45. First support
is seen at $3.35 and then at $3.30. Wyckoff's Market Rating:
2.0.
December
oats closed up 3/4 cent at $1.43 1/2 today. Prices hit a fresh
two-month low early on, and then rebounded to close near the
session high. If there is good follow-through buying this
week, then today's low would likely be a near-term low and
prices would more likely work sideways to higher in the coming
weeks. A close below today's low of $1.38 3/4 would open the
door to more downside pressure in the near term, including
a possible retest of the July low of $1.28 1/4. First resistance
comes in at $1.44 1/2--today's high--and then at $1.47--last
week's high. First support is seen at $1.40 and then at $1.38
3/4. Wyckoff's market rating: 3.0.
SOFTS:
March sugar closed up 5 points at 9.32 cents today. Prices
set another fresh contract high today. Prices have recently
seen a bullish upside "breakout" from a congestions
area on the daily bar chart, which does suggest more upside
price potential in the near term. The next upside objective
for the bulls is the psychological resistance level of 10.00
cents. First resistance is seen at 9.37 cents--today's contract
high--and then at 9.50 cents. First support is seen at 9.25
cents--today's low-- and then at 9.10 cents. Wyckoff’s Market
Rating: 8.0.
December
coffee closed down 135 points at 74.50 cents today. Prices
scored a bearish "outside day" down on the daily
bar chart today and hit a fresh four-week low, and closed
near the session low. Some more near-term chart damage was
inflicted today, and the door is open to more downside pressure
in the near term, including a challenge of the August low
of 67.90 cents. It's going to take multiple closes back above
80.00 cents to give the bulls some fresh upside momentum.
First resistance is seen at 76.55 cents--today's high--and
then at 77.00 cents. First support is seen at 74.00 cents
and then at 73.00 cents. Wyckoff’s Market Rating: 3.0.
December
cocoa closed down $20 at $1,440 today. Chart damage has occurred
recently. The bears still have the technical advantage at
present. A three-month-old downtrend line is in place on the
daily bar chart. It's going to take a close above the recent
high of $1,543 to give the bulls any fresh upside momentum.
First resistance is seen at $1,465--this week's high--and
then at $1,480. First support is seen at $1,420 and then at
$1,400. Wyckoff’s Market Rating: 2.5.
December
cotton closed down 173 points at 44.79 cents today. Prices
gapped sharply lower on the daily bar chart and hit a fresh
two-month low today in the wake of a bearish USDA report today.
Even hurricane damage to the cotton crop did not put a big
dent in the massive U.S. cotton crop production. Prices did
close off the session low. Now, a close below today's low
of 43.75 would produce even more chart damage and open the
door to a move to the contract low of 42.60 cents, scored
in August. The bears remain in firm technical control. A six-week-old
downtrend is in place on the daily bar chart. First resistance
is seen at 45.50 cents--today's high--and then at 46.40 cents--the
top of today's downside gap on the daily chart. First support
is seen at 43.75 cents--today's low--and then at 42.60 cents.
Wyckoff's Market Rating: 1.5.
November
orange juice closed up 160 points at 85.35 cents today. Today's
USDA orange crop report was termed bullish, showing a smaller-than-expected
U.S. crop in the wake of hurricane damage. However, prices
did close near the session low, and this is a bit worrisome
for the bulls. The recent "collapse in volatility"
made me suspect a bigger price move was on the horizon, and
we got that bigger move today. Bulls still have the technical
advantage. Next resistance comes in at 86.30 cents--today's
high--and then at 87.00 cents. First support is seen at 84.00
cents and then at 82.50 cents--the top of a gap area on the
daily bar chart. Wyckoff's Market Rating: 7.0.
November
lumber futures closed down $1.30 at $309.10 today. Prices
closed at a fresh contract low close today as the strong bear
market rolls on. Bears are in full command. Their next downside
objective is the $300.00 level. The market is now short-term
oversold, technically, and due for a short-covering bounce
very soon. Look for more high volatility in the near term.
Next resistance is seen at $315.90--this week's high--and
then at $320.00. First support is seen at $308.30--the contract
low--and then at $305.00. Wyckoff's Market Rating: 1.0.
METALS:
December COMEX gold futures closed down $6.80 at $416.60 today.
Prices closed near the session low today on profit taking
from recent gains and on the rebound in the U.S. dollar versus
the major currencies today. No serious chart damage occurred
in gold today and this pullback after recent strong gains
is not unexpected. Bulls still have the technical edge at
present and there are no warning signals of a topping process.
However, strong follow-through selling pressure this week
would produce some near-term chart damage. A 5.5-month-old
uptrend line remains in place on the daily bar chart. First
resistance is seen at $420.00 and then at $422.50. Support
is seen at $414.20--today's low--and then at $412.50. Wyckoff's
Market Rating: 6.0.
December
silver futures closed down 19.7 cents at $7.055 an ounce today.
Prices backed off a bit today on good profit-taking pressure
after hitting a 5.5 month high Friday. No serious chart damage
was inflicted today. Bulls are still in technical control.
Their next major upside objective is psychological resistance
at the $8.00 level. First resistance is seen at $7.265--today's
high--and then at $7.34--last week's high. Next support is
seen at $6.96--today's low--and then at $6.90. Wyckoff's Market
Rating: 6.5.
December
N.Y. copper closed down 205 points at 144.80 cents today.
Prices backed off today on profit-taking pressure from recent
strong gains, and no serious chart damage occurred. Bulls
remain strong. The next upside objective for the bulls is
longer-term resistance at the 150.00 level. First resistance
is seen at 146.90 cents--today's high--and then at 148.20
cents--the contract high. First support is seen at 142.30--today's
low--and then at 141.00 cents. Wyckoff's Market Rating: 8.0.
ENERGIES:
November crude oil closed down $1.13 at $52.51 a barrel today.
Prices hit another fresh all-time high of $54.05 a barrel
today. However, prices then backed off sharply and closed
near the session low, and scored a bearish "outside day"
down on the daily bar chart. Now, if there is strong follow-through
selling pressure on Wednesday, a bearish key reversal down
on the daily bar chart would be confirmed. That would be one
early technical clue that a near-term top is in place. Would-be
top pickers still do not want to stand in front of this steaming
locomotive. First resistance is seen at $53.00 and then at
$54.05--the contract high. First support is seen at $52.00
and then at $51.00. Wyckoff's market rating: 9.0.
November
heating oil closed down 162 points at $1.4545 today. Prices
hit another fresh contract high today and then backed off
to close near the session low. Look for more volatile trading
in the near term. First resistance lies at $1.4870--the contract
high--and then at $1.5000. First support is seen at $1.4500--today's
low--and then at $1.4400. Wyckoff's market rating: 9.0.
November
unleaded gasoline closed down 247 points at 1.3803 today.
Prices scored a bearish "outside day" down on the
daily bar chart and closed near the session low. Look for
more high volatility in the near term. Bulls are still strong.
Stiff resistance is seen at 1.4150--the contract high--and
then at 1.4200. First support is seen at 1.3750--today's low--and
then at 1.3600. Wyckoff's Market rating: 8.0.
November
natural gas closed down 35.7 cents at $6.636 today. Prices
gapped sharply lower on the daily bar chart today and closed
near the session low. Chart damage was inflicted today, and
follow-through selling pressure on Wednesday would produce
more serious chart damage. There is stiff resistance at the
$6.60 area. Would-be top pickers still do not want to stand
in front of this market, either. This market is still a gunslinger's
market at present. Trading has become extremely volatile in
nat gas. Look for more high volatility in the near term. First
resistance is seen at $6.87--today's high--and then at $7.00.
First support is seen at $6.60 and then at $6.50. Wyckoff's
market rating: 6.5.
CRB
Index: The cash index closed down 3.82 at 284.42
today. Prices pulled back today on large losses in the energies,
and in soybeans, hogs and cotton futures. Prices just Monday
scored a fresh all-time high today. Bulls are still in technical
control of the CRB. Commodity price inflation is here and
it is not going away any time soon. This is good news for
commodities market bulls. Wyckoff's Market Rating: 8.0.
STOCKS,
FINANCIALS, CURRENCIES: The December Euro currency
closed down 96 points at 1.2317 today. Prices today backed
off from last Friday's sharp gains, in the wake of a Euro-bullish
U.S. jobs report. Bulls still have the technical advantage,
but a close below the 1.2200 area would give the bears some
fresh near-term momentum. A close above the July high of 1.2455
would provide the bulls with solid upside technical power.
However, that price level has proven elusive the past couple
months. First resistance for the Euro lies at 1.2387--today's
high--and then at 1.2439--the September high. Next support
is seen at 1.2284--today's low--and then at 1.2250. Wyckoff's
Market Rating: 6.0.
The
December Japanese yen closed down 25 points at .9142 today.
Prices backed off a bit today on profit taking from big gains
on Friday. Bulls still have some momentum from those big gains,
and a close above Friday's high of .9182 would provide the
bulls with some power to challenge the August high of .9243.
Bears remain in overall technical control, however. First
resistance is seen at .9182--Friday's high--and then at .9200.
First support is seen at .9113--today's low--and then at .9100.
Wyckoff's Market Rating: 4.0.
The
December Swiss franc closed down 49 points at .7974 today.
Prices today took back about half of Friday's big gains. Prices
are right back in the middle an uptrending channel on the
daily bar chart. Bears remain in technical control. First
resistance is seen at .8018--today's high--and then at .8040--last
week's high. First support is seen at .7949--today's low--and
then at .7920. Wyckoff's market rating: 4.0.
The
December Australian dollar futures closed down 44 points at
.7271 today. Prices backed off today on profit-taking pressure
after strong gains Friday that pushed prices to a fresh six-month
high. Bulls still have the solid technical advantage. First
resistance is seen at .7302--today's high--and then at .7323--last
week's high. Next support is seen at .7225--today's low--and
then at .7200. Wyckoff's Market Rating: 7.0.
The
December Canadian dollar closed down 35 points at .7949 today.
Prices backed off on profit-taking pressure today after hitting
a fresh contract high Friday. Bulls are still technically
very strong. A five-month-old uptrend line is in place on
the daily bar chart. First resistance is seen at .7971--today's
high--and then at .7994--last week's contract high. First
support is seen at .7929--today's low--and then at .7900.
Wyckoff's Market Rating: 8.0.
The
December British pound closed down 69 points at 1.7797 today.
Not much new. The bears have technical control of this market.
It's going to take a close above 1.8150 to give the bulls
some solid upside technical momentum. First resistance is
seen at 1.7909--today's high--and then at 1.8000. First support
is seen at 1.7761--today's low--and then at 1.7700. A close
below the September low of 1.7569 would give the bears serious
downside power. Wyckoff's Market Rating: 4.0.
The
December U.S. dollar index closed up 48 points at 88.15 today.
Prices closed near the session high on short covering in a
bear market today. Prices sunk sharply last Friday and hit
a fresh contract low in the wake of a bearish U.S. jobs report.
Bears remain in overall technical control. A close below last
Friday's contract low of 87.44 would create more serious chart
damage and open the door to more solid downside pressure in
the near term. Next resistance lies at 88.32--today's high--and
then at 88.60. First support is seen at 88.00 and then at
87.73--today's low. Wyckoff's Market Rating: 2.0.
December
U.S. T-Bonds closed up 11/32 at 112 16/32 today. Prices today
saw follow-through buying after strong gains on Friday, in
the wake of a bullish U.S. jobs report. Now, the bulls have
some fresh upside power and a challenge of the contract high
of 114 3/32, scored last month, is likely in the near term.
A close back below the 109 even level would give the bears
some good downside technical momentum. First resistance is
seen at 112 23/32--today's high--and then at 113 even. First
support is seen at 112 2/32--today's low--and then at 111
16/32. Wyckoff's market rating: 6.5.
December
U.S. T Notes closed up 7.5 (32nds) at 112.26.0 today. Prices
hit a fresh two-week high today, and bulls have some fresh
technical power. A challenge of the September high of 113.25.5
is likely in the near term.
First resistance is seen at 112.31.5--today's high--and then
at 113.16.0. First support is seen at 112.17.5--today's low--and
then at 112.00.0. Wyckoff's market rating: 6.5.
GENERAL
STOCK MARKET COMMENT: The stock indexes closed lower
today in more lackluster trading. Overall, look for choppier
trading in the indexes heading into the November U.S. presidential
election.
The
December Nasdaq futures closed down 3.00 at 1,439.50 today.
Prices did close near the session high today. We may have
seen a minor selling "exhaustion tail" form on the
daily bar chart today, whereby selling interest dried up at
lower price levels and prices rebounded. Bulls will need to
show some power this week, to keep their technical edge. First
resistance is seen at 1,450.00 and then at 1,480.00--last
week's high. First support is seen at 1,419.00--today's low--and
then at 1,400.00. Wyckoff's market rating: 5.5.
The
December S&P 500 futures closed down 3.60 at 1,122.40
today. Bulls still have the slight technical advantage on
a near-term basis, but need to step up and show some power
this week to keep it. First resistance is seen at 1,126.80--this
week's high--and then at 1,130.00. First support is seen at
1,116.00--today's low--and then at 1,110.00. Wyckoff's market
rating: 5.5.
The
December Dow futures closed down 18 points at 10,068 today.
Bears have the slight near-term technical advantage, as this
remains the weak sister of the three major U.S. stock indexes.
First resistance in the Dow lies at 10,100 and then at 10,150.
First support is seen at 10,010--today's low--and then at
9,970--the September low. Wyckoff's market rating: 4.0.
Click
below for my welcome letter to all new customers and for an
explanation of my Market Rating System.
http://www.jimwyckoff.com/newsletter/WelcomeAboard/
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
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