Monday, August 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. The U.S. stock indexes are pointed to higher openings when the New York day session begins. The focus of the marketplace this week is on the annual Federal Reserve symposium held in Jackson Hole, Wyoming. The confab has been pared back a bit and parts of it will be virtual this year due to the spreading delta variant of the coronavirus. Early this week, traders and investors are reassessing recent notions the Federal Reserve will lean hawkish on U.S. monetary policy at the Fed symposium. The rapidly spreading Covid variant has many now thinking the Fed will have to wait longer to reel in its easy-money policies. Dallas Fed President Rob Kaplan said Friday he is rethinking his call for an early tapering process for the Fed’s bond purchases, due to the spreading virus and its potential impact on the U.S. economy.
It appears there is less risk aversion in the global marketplace to start the trading week. There is still a chaotic situation in now-Taliban-controlled Afghanistan, with people, including Americans, still try to get out of that country. However, it appears the markets are now looking past the matter. Veteran market watchers are well aware of what can be the historically turbulent months of September and October that lie just ahead for the stock and financial markets.
The key outside markets today see the U.S. dollar index weaker after hitting a 10.5-month high last Friday. Nymex crude oil futures prices are solidly higher and trading around $64.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.28%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash and services PMIs, and existing home sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage and have regained momentum. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above 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 contract high of 4,476.50 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,433.50 and then at 4,400.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid chart advantage and have regained momentum. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the contract high of 15,172.50 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 15,086.50 and then at 15,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 165 28/32 and then at last week’s high of 166 6/32. Buy stops likely reside just above those levels. Shorter-term support lies at 165 even and then at last week’s low of 164 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are weaker in early U.S. trading. 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 134.06.0 and then at 134.14.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 133.29.0 and then at 133.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are higher in early U.S. trading, on a corrective bounce after hitting a 12-month low last week. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at 1.1749 and then at 1.1800. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1697 and then at last week’s low of 1.1669. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading after hitting a 2.5-month low overnight. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $64.32 and then at $65.00. Look for sell stops just below technical support at $63.00 and then at the overnight low of $61.74. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were higher overnight on corrective bounces after last week’s losses. Keener general marketplace risk appetite to start the week is friendly for the grains. The key outside markets are bullish for the grains today—sharply higher crude oil prices and a weaker U.S. dollar index.
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