Jim Wyckoff

Dominate Your Market

Daily Morning Report

Dark clouds for equities may be silver lining for metals

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CNBC’s “Pro Playbook” email dispatch on Thursday said: “August was rough for Wall Street, and September could be more of the same. Data compiled by the Stock Trader’s Almanac shows September is on average the worst month for stocks. Since 1950, the S&P 500 has averaged a loss of 0.5% in September, including a drop of 11.9% in 1974. The benchmark index has also posted September losses in the last two years, dropping 4.8% in 2021 and 3.9% in 2020. This historically weak performance for the month, along with August’s declines and expectations of even higher rates from the Federal Reserve and other central banks, raise concern over a potential retest of the mid-June lows” in the stock indexes.

The above scenario may be what puts in price bottoms in for the gold and silver markets. Gold hit a six-week low Thursday and silver a more-than-two-year low.

The metals markets (hard assets) and the stock market (paper assets) compete for trader and investor monies, and the turbulent months of September and October for the stock and financial markets may be just what the doctor ordered for the safe-haven gold and silver markets.

It can also be argued that the hawkish central banks and notions of weaker global economic growth that are likely to crimp consumer and commercial demand for metals, has now been factored into gold and silver prices. Don’t be surprised if a “sell the rumor, buy the fact” scenario develops in the gold and silver markets in the near term, regarding the bearish central bank element for the metals.

Also, from a short-term technical perspective, the gold and silver markets are oversold, technically, and due for corrective bounces very soon.

Markets begin September with keener risk aversion

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Thursday, September 1–Jim Wyckoff’s Morning Markets Report

Global stock markets were lower overnight. U.S. stock indexes are pointed toward lower openings and at five-week lows when the New York day session begins. Risk aversion is higher on this first day of September, a month that history has shown can be a rocky one for stock and financial markets. There are new reports of major Covid lockdowns in China, the world’s second-largest economy. Reports said 21 million people have been locked down in a major industrial region of the country. Economic data out of China Friday was also dour, with the purchasing managers indexes (PMIs) and housing/property indicators showing weakness. This has prompted concerns of slowing consumer and commercial demand in China, which have pressured raw commodity markets this week, with crude oil leading the way down. Other major economies are tightening their monetary policies, which will also work to slow their growth. Many market watchers fear U.S. and global economic recessions are setting in.

Traders are awaiting Friday morning’s employment situation report from the Labor Department. That report is expected to show the key non-farm payrolls growth number at up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.

The key outside markets today see Nymex crude oil prices lower and trading around $87.50 a barrel. The U.S. dollar index is solidly higher in early U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.2%. The 2-year U.S. Treasury note yield hit a 15-year high today, at 3.51%. The inverted yield curve is another clue suggesting a U.S. economic recession is imminent.

It’s a busy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job-cuts report, revised productivity and costs, the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, monthly chain store sales, domestic auto sales and construction spending.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are lower and hit a five-week low in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in Wednesday’s high of 4,035.00 and then at at this week’s high of 4,089.50. Support for active traders is seen at 3,900.00 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.0

December Nasdaq index futures: Prices are lower and hit a five-week low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,366.75 and then at Wednesday’s high of 12,578.75. On the downside, shorter-term support is seen at the overnight low of 12,188.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the advantage. 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 neutral to bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 136 14/32 and then at this week’s high of 137 2/32. Shorter-term support lies at the overnight low of 134 19/32 and the at 134 even. Wyckoff’s Intra-Day Market Rating: 3.5

December U.S. T-Notes: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the technical advantage. 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 neutral early today. Shorter-term resistance lies at Wednesday’s high of 117.07.5 and then at this week’s high of 117.17.0. Shorter-term technical support lies at the overnight low of 116.08.0 and then at 116.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5

EURO CURRENCY

The December Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0169 and then at 1.0200. Shorter-term support is seen at this week’s low of 1.0050 and then at the contract low of .9988. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are lower again and hit a two-week low in early U.S. trading. Bulls are fading fast. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $89.63 and then at $91.00. Look for sell stops just below technical support at the overnight low of $87.12 and then at the August low of $85.37. Wyckoff’s Intra-Day Market Rating: 3.0

GRAINS

U.S. grain futures were lower overnight. Slumping crude oil and other raw commodity prices and keener risk aversion this week are bearish for the grain markets. Bears are gaining technical momentum, too, to suggest more price pressure in the near term. Weekly USDA export sales are delayed the next two weeks due to technical glitches.

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

Crude oil prices back off

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The crude oil market bulls are fading fast after prices hit a four-week high earlier this week. Tighter global monetary policies are going to slow economic growth and that’s spooking the crude oil market bulls. A drop in October Nymex crude oil futures prices below chart support at the August low of $85.37 would produce serious near-term technical damage to suggest a fresh leg lower in prices in the near term. Stay tuned! —Jim Wyckoff

Risk aversion still elevated at mid-week

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Wednesday, August 31–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Traders and investors remain tentative at mid-week, following the Federal Reserve’s annual Jackson Hole symposium that saw U.S. Fed officials, including Chairman Powell, lean aggressively hawkish on U.S. monetary policy. Other major central banks of the world are also tightening their monetary policies—all in an effort to tamp down problematic price inflation, even if it slows global economic growth.

Speaking of inflation, the Euro zone got more hot readings as the August consumer price index rose 9.1%, year-on-year, which was slightly above market expectations.

The markets have not reacted much, but are paying close attention to reports that Taiwan’s military fired warning shots at drones, thought to be from mainland China, that were flying close to Taiwan.

The U.S. data point of the week is the August U.S. employment situation report from the Labor Department on Friday. The key non-farm payrolls growth number is forecast to come it up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.

The key outside markets today see Nymex crude oil prices solidly lower and trading around $88.50 a barrel. Reports are now indicating OPEC-plus will not cut its collective crude oil production. The U.S. dollar index is higher in early U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.151%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the Chicago ISM business survey, and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are a bit higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,089.50 and then at 4,125.00. Support for active traders is seen at this week’s low of 3,981.75 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are 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 early today. Shorter-term technical resistance is seen at the overnight high of 12,553.25 and then at this week’s high of 12,730.25. On the downside, shorter-term support is seen at the overnight low of 12,427.00 and then at this week’s low of 12,325.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the advantage. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 136 14/32 and then at this week’s high of 137 2/32. Shorter-term support lies at the overnight low of 135 11/32 and the at 135 even. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the technical advantage. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 117.07.5 and then at this week’s high of 117.17.0. Shorter-term technical support lies at the overnight low of 116.22.5 and then at 116.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are lower in early U.S. trading. 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 and 18-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 last week’s high of 1.0169 and then at 1.0200. Shorter-term support is seen at the contract low of .9988 and then at .9950. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are solidly lower in early U.S. trading. Bulls are fading fast. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 $91.00 and then at the overnight high of $92.73. Look for sell stops just below technical support at the overnight low of $88.27 and then at $87.00. Wyckoff’s Intra-Day Market Rating: 3.0

GRAINS

U.S. grain futures were lower overnight, on corrective pullbacks from recent gains. Beneficial rains have fallen in the Corn Belt and Plains states recently and that’s bearish for the grains, especially soybeans. Slumping crude oil prices and keener risk aversion this week are also negative for the grain markets.

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

Stock markets rebound Tuesday

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Tuesday, August 30–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite is a bit improved Tuesday but still not robust. Traders and investors are still concerned about Covid lockdowns in China that are crimping the world’s second-largest economy. The U.S. data point of the day is the consumer confidence index.

The U.S. data point of the week on this unofficial last week of summer is the August U.S. employment situation report from the Labor Department on Friday. The key non-farm payrolls growth number is forecast to come it up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.

The key outside markets today see Nymex crude oil prices lower and trading around $95.50 a barrel. The U.S. dollar index is lower in early U.S. trading, on a corrective pullback after hitting a 20-year high on Monday. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.067%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the monthly and quarterly house price indexes, the S&P/CoreLogic home price indexes, and the consumer confidence index.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at 4,150.00. Support for active traders is seen at Monday’s low of 4,024.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are 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 12,850.00 and then at 13,000.00. On the downside, shorter-term support is seen at the overnight low of 12,563.75 and then at this week’s low of 12,480.25. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are higher in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 137 2/32 and then at 137 22/32. Shorter-term support lies at the overnight low of 136 2/32 and the at Monday’s low of 135 23/32. Wyckoff’s Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the technical advantage. 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 neutral to bullish early today. Shorter-term resistance lies at 117.24.0 and then at 118.00.0. Shorter-term technical support lies at the overnight low of 117.03.5 and then at this week’s low of 116.28.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The December Euro currency futures are firmer in early U.S. trading, on more short covering. Bears still 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 and 18-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 last week’s high of 1.0169 and then at 1.0200. Shorter-term support is seen at 1.0050 and then at the contract low of .9988. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Nymex crude oil prices are lower in early U.S. trading after hitting a four-week high overnight. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $97.66 and then at last week’s high of $99.00. Look for sell stops just below technical support at Monday’s low of $92.29 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were lower overnight, on corrective pullbacks from recent gains. Beneficial rains have fallen in the Corn Belt and Plains states recently and that’s bearish for the grains, especially soybeans. However, corn and soybean futures markets are still in price uptrends on the daily bar charts. Wheat bulls have also gained some momentum just recently.

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

U.S. Treasury futures trending down

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The U.S. Treasury bond and note futures markets are trending lower on the daily bar charts and the bears have the near-term technical advantage. The path of least resistance for prices will remain sideways to lower until an early, significant technical clue arises to suggest the downtrends are ending. You’ll get those early chart clues on potential price trend changes in my daily market reports. Stay tuned! —Jim Wyckoff