Thursday, September 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The Nasdaq and S&P 500 hit record highs Wednesday and are due for normal corrective pullbacks in their existing uptrends. There also may be a bit more risk aversion in the marketplace Thursday, on reports the U.S. will impose restrictions on its Chinese diplomats, in retaliation for China doing the same to its U.S. diplomats.
On the bright side, the London Financial Times reported the Covid-19 herd immunity may be closer than previously thought. The story said tests for antibodies may be dramatically underestimating the proportion of people who have been infected with the virus, according to scientists. Other reports also said U.S. health officials are saying a vaccine could be ready for distribution by November 1.
The important outside markets today see Nymex crude oil prices lower, hitting a four-week low and trading around $40.60 a barrel. The U.S. dollar index is higher again today on a corrective bounce after hitting a two-year low Tuesday. The yield on the U.S. Treasury 10-year note is trading around 0.65% today.
In the U.S. today, focus will be on the weekly jobless claims report, which is expected to show claims up around 950,000. Traders are also awaiting Friday’s employment situation report for August from the U.S. Labor Department, expected to show non-farm payrolls gains of around 1.3 million.
Other U.S. economic data due for release Thursday includes the Challenger job-cuts report, the international trade report, revised productivity and costs, the U.S. services PMI, the ISM report on business services, the global services PMI, and monthly retail chain store sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading, on a normal corrective pullback from recent strong gains that saw prices hit a record high Wednesday. Bulls have the solid overall near-term technical advantage amid a five-month-old price uptrend in place. There are no strong, early chart clues to suggest a market top is close at hand. 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 to bearish early today. Today, shorter-term technical resistance comes in at the record high of 3,587.00 and then at 3,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Wednesday’s low of 3,526.25 and then at 3,500.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are lower in early U.S. trading, on a corrective pullback from recent strong gains that saw prices hit a record high Wednesday. Bulls remain in strong overall technical control. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the record high of 12,465.25 and then at 12,500.00. On the downside, shorter-term support is seen at Wednesday’s low of 12,172.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bears have the slight overall near-term chart advantage. 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 technical resistance is seen at the overnight high of 179 2/32 and then at 179 16/32. Shorter-term support lies at the overnight low of 178 15/32 and then at 178 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 139.24.5 and then at 139.28.0. Shorter-term technical support lies at Wednesday’s low of 139.14.5 and then at 139.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are weaker on more profit taking after hitting a 1.5-year high Tuesday. Bulls still have the solid overall near-term technical advantage. Prices have been trending up for four months. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1879 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1814 and then at 1.1790. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are lower and hit a four-week low in early U.S. trading. Bulls are fading late this week. A price uptrend on the daily chart has been negated. The shorter-term moving averages are neutral early today as the 4-day is below with the 9-day. The 9-day is even with 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 $41.79 and then at $42.50. Look for sell stops just below technical support at the overnight low of $40.64 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. Bulls are still in near-term technical control. Traders will closely examine this morning’s weekly USDA export sales report, especially how much demand is coming from China in the latest week. The U.S. corn and soybean crops are now heading into the stretch toward harvest, which means the recent dry and hot weather has now mostly been factored into prices. Thus focus will be more on early harvest progress and export demand, and less on weather—unless there is frost in the forecast.
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