Daily Morning Report

Tuesday, August 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, including the S&P 500 and Nasdaq again at record highs. Risk appetite is upbeat so far this week. The marketplace breathed a sigh of relief on upbeat news regarding U.S.-China trade talks. Senior trade officials on both sides held a videoconference Monday and reaffirmed the commitment to a partial trade deal agreed upon in January.

A positive German IFO business climate index report on Tuesday helped to boost the Euro currency. The main IFO index rose to 92.6 in August from 90.4 in July and also beat market expectations.

While new Covid-19 cases in the U.S. continue to stymie the world’s largest economy as it tries to regain momentum from the springtime lockdowns, reports say China, the world’s second-largest economy, is making rapid progress on restoring conditions to normal. Most agree that China’s more rapid recovery than the U.S. is due to China’s very strict lockdown and quarantine measures it mandated on its citizens. Still, reports also say China is quietly buying U.S. and other global food products to make up a huge shortfall caused by major flooding, and crop and infrastructure damage, along the Yangtze river. Some traders wonder if this situation could help to jumpstart price inflation in the raw commodity sector.

Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.

The important outside markets today see Nymex crude oil prices near steady and trading around $42.65 a barrel. The hurricane in the Gulf of Mexico that is bearing down on the U.S. Gulf coast has pushed gasoline futures prices to a five-month high. The U.S. dollar index is lower and not far above its recent two-year low. The yield on the U.S. Treasury 10-year note rose to 6.8% Tuesday, in another sign of rising confidence in the marketplace.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, the consumer confidence index, and new residential sales.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are higher and hit another record high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a five-month-old price uptrend in place. There are no early chart clues to suggest a market top is close at hand. The saying, “Never short a dull market” is favoring the bulls at present. 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 bullish early today. Today, shorter-term technical resistance comes in at 3,450.00 and then at 3,475.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,426.75 and then at Monday’s low of 3,393.50. Wyckoff’s Intra-day Market Rating: 7.0

September Nasdaq index futures: Prices are higher and near Monday’s record high in early U.S. trading. Bulls remain in solid 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 neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s record high of 11,722.50 and then at 11,800.00. On the downside, shorter-term support is seen at Monday’s low of 11,528.25 and then at 11,407.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are solidly lower in early U.S. trading. Bulls still have the  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 to bearish early today. Shorter-term technical resistance is seen at 179 even and then at the overnight high of 179 9/32. Shorter-term support lies at 178 even and then at the August low of 177 16/32. Wyckoff’s Intra-Day Market Rating: 3.5

September U.S. T-Notes: Prices are solidly lower in early U.S. trading. Bulls still have the firm near-term technical 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 to bearish early today. Shorter-term resistance lies at the overnight high of 139.15.5 and then at 139.20.0. Shorter-term technical support lies at 139.00.0 and then at the August low of 138.28.5. 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. Bulls have the solid overall near-term technical advantage. Prices have been trending up for over three months. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at last Friday’s high of 1.1888 and then at 1.1926. Shorter-term support is seen at the overnight low of 1.1789 and then at last week’s low of 1.1758. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

October Nymex crude oil prices are slightly up in early U.S. trading. Bulls have the overall near-term technical advantage, but prices have been trading sideways at higher levels for weeks. 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $43.29 and then at the August high of $43.68. Look for sell stops just below technical support at $42.00 and then at last week’s low of $41.46. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

US grain futures are solidly up in early U.S. pre-market trading. Bulls continue to make steady progress in pushing prices up from the August lows, amid less-than-ideal late-season crop conditions for U.S. corn and soybeans. USDA Monday afternoon lowered its good to excellent ratings for both corn and soybeans. Meantime, China is keeping up its steady pace of purchases of mostly U.S. soybeans. Speculators are showing more interest in the grain futures markets on the long side.

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

Monday, August 24–Jim Wyckoff’s Morning Markets Report

Note: I’m back from a week’s vacation in the U.S. Rocky Mountain wilderness. Thanks for all the kind and concerned emails to me, wondering where I was. I must really like what I do because I look forward to getting back to serving you, my valued readers.—Jim

Global stock markets were higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, including the S&P 500 and Nasdaq at record highs. Risk appetite is upbeat to start the trading week, despite two tropical storms brewing in the Gulf of Mexico and wildfires raging in California and Colorado.

President Trump on Sunday announced an emergency authorization for the use of recovered Covid-19 patient blood plasma to fight off the virus. The global stock markets may have gotten a slight lift from this news.

Meantime, markets are looking past a comment Trump made to Fox News over the weekend that the U.S. does not need to do business with China. China and the U.S. appear to be moving along with their “Phase 1” trade agreement reached in January, with China buying U.S. agricultural products at a steady pace. Reports from Asia said major flooding in China in recent weeks has destroyed large tracts of crop land that will keep China on a hefty food import pace.

Gold prices are higher Monday morning, on some perceived bargain hunting as prices have backed down from the record high scored in early August and are trading below $2,000. A weaker U.S. dollar index Monday is aiding the precious metals market bulls.

Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.

The important outside markets today see Nymex crude oil prices firmer and trading around $42.65 a barrel. The U.S. dollar index is lower and not far above its recent two-year low.

U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are solidly higher and hit a record high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a five-month-old price uptrend in place. 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 bullish early today. Today, shorter-term technical resistance comes in at 3,425.00 and then at 3,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,393.50 and then at 3,370.00. Wyckoff’s Intra-day Market Rating: 7.0

September Nasdaq index futures: Prices are solidly higher and hit a record high in early U.S. trading. Bulls remain in solid 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 11,676.25 and then at 11,700.00. On the downside, shorter-term support is seen at the overnight low of 11,567.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 7.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls have the  firm 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 180 even and then at 180 16/32. Shorter-term support lies at 179 even and then at 178 16/32. 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 firm near-term technical 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 resistance lies at last week’s high of 139.22.0 and then at 139.28.0. Shorter-term technical support lies at Friday’s low of 139.13.5 and then at 139.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The September Euro currency futures are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices have been trending up for over three months. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.1888 and then at 1.1926. Shorter-term support is seen at the overnight low of 1.1789 and then at last week’s low of 1.1758. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

October Nymex crude oil prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage, but prices have been trading sideways at higher levels for weeks. 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $43.29 and then at the August high of $43.68. Look for sell stops just below technical support at $42.00 and then at last week’s low of $41.46. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

US grain futures are firmer in early U.S. pre-market trading. Bulls continue to make steady progress in pushing prices up from the August lows, amid less-than-ideal late-season crop conditions for U.S. corn and soybeans. USDA this afternoon is likely to slightly lower its good to excellent ratings for both corn and soybeans. Meantime, China is keeping up its steady pace of purchases of mostly U.S. soybeans. Finally, speculators are showing more interest in the grain futures markets on the long side.

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

Friday, August 21–Jim Wyckoff’s Morning Markets Report

Note: I am on vacation this week. My friend and fellow analyst Ken Seehusen is producing my morning and afternoon reports. Ken’s format is a bit different than mine, but I think you will enjoy and benefit from his work.

The STOCK INDEXES:The September NASDAQ 100 was slightly lower overnight following Thursday’s rally to a new all-time high close. The low-range trade sets the stage for a steady to slightly lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends this year’s rally into uncharted territory upside targets will be hard to project. Closes below the 20-day moving average crossing at 11,088.06 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 11,524.00. Second resistance is unknown. First support is the 20-day moving average crossing at 11,088.06. Second support is the 50-day moving average crossing at 10,643.13.

The September S&P 500 was slightly lower overnight as it consolidates below February’s high. The low-range overnight trade sets the stage for a steady to slightly lower opening when the day session begins trading later this morning. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above February’s high crossing at 3393.52 would open the door into uncharted territory. Closes below the 20-day moving average crossing at 3315.60 would confirm that a short-term top has been posted. First resistance is February’s high crossing at 3393.52. Second resistance is unknown. First support is the 20-day moving average crossing at 3315.60. Second support is the 50-day moving average crossing at 3205.01.

INTEREST RATES: September T-bonds were steady to slightly higher overnight as they continue to form a possible bear-flag below the January-June uptrend line crossing near 179-20. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 180-11 would confirm that a short-term low has been posted. If September resumes the decline off August’s high, July’s low crossing at 177-06 is the next downside target. First resistance is the 50-day moving average crossing at 179-20. Second resistance is the 20-day moving average crossing at 180-11. First support is last-Thursday’s low crossing at 177-16. Second support is July’s low crossing at 177-06.

September T-notes were higher overnight as they consolidates some of this month’s decline. The high-range overnight trade sets the stage for a steady to higher opening with the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 139.210 would signal that a short-term low has been posted. If September resumes this month’s decline, July’s low crossing at 138.235 is the next downside target. First resistance is the 20-day moving average crossing at 139.210. Second resistance is August’s high crossing at 140.130. Third resistance is the March high on the weekly continuation chart crossing at 140.240. First support is last-Thursday’s low crossing at 139.285. Second support is July’s low crossing at 138.235.

ENERGY MARKETS:October crude oil was slightly lower overnight as it extends this month’s trading range above the 50% retracement level of the February-April-decline crossing at $46.44. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the 50-day moving average crossing at $40.91 would confirm that a short-term top has been posted. If October renews the rally off April’s low, the 62% retracement level of the February-April-decline crossing at $46.44 is the next upside target. First resistance is the August 5th high crossing at $43.68. Second resistance is the 62% retracement level of the February-April-decline crossing at $46.44. First support is the 20-day moving average crossing at $42.06. Second support is the 50-day moving average crossing at $40.91. Third support is the July 30^th low crossing at $39.00.

October heating oil was lower overnight as it extends the July-August trading range. The low-range overnight trade sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $125.33 are needed to confirm that a short-term top has been posted. If October resumes the rally off April’s low, the 38% retracement level of the January-April-decline crossing at $133.94 is the next upside target. First resistance is August’s high crossing at $131.92. Second resistance is the 38% retracement level of the February-April-decline crossing at $133.94. First support is the 50-day moving average crossing at $125.33. Second support is the July 30^th low crossing at $119.03.

October unleaded gas was lower overnight due to light profit taking due concerns over stagnant or falling demand. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If October extends the rally off April’s low, the 62% retracement level of the January-March-decline crossing at $130.29 is the next upside target. Closes below the 50-day moving average crossing at $115.00 would signal that a short-term top has been posted. First resistance is the overnight high crossing at $122.61. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 20-day moving average crossing at $116.92. Second support is the 50-day moving average crossing at $115.00.

October Henry natural gas was lower overnight as it consolidates some of the rally off June’s low. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off July’s low, the April-2019 high crossing at 2.697 is the next upside target. Closes below the 20-day moving average crossing at 2.291 would confirm that a short-term top has been posted. First resistance is Tuesday’s high crossing at 2.598. Second resistance is the April-2019 high crossing at 2.697. First support is the 10-day moving average crossing at 2.428. Second support is the 20-day moving average crossing at 2.291.

CURRENCIES:The September Dollar was slightly higher overnight as it extends a short covering bounce off Tuesday’s low. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that additional short covering gains are possible near-term. Closes above the August 3rd high crossing at $93.98 are needed to confirm that a short-term low has been posted. If September renews this year’s decline, long-term support on the monthly continuation chart crossing at 90.21 is the next downside target. First resistance is the August 3^rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.21. First support is Tuesday’s low crossing at $92.11. Second support is long-term support on the monthly continuation chart crossing at 90.21.

The September Euro was lower in overnight trading as it consolidates some of this month’s gains. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 3^rd low crossing at $117.07 would confirm that a short-term top has been posted. If September extends the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. First resistance is Tuesday’s high crossing at $119.73. Second resistance is the 50% retracement level of the 2018-2020 decline crossing at $120.83. First support is the August 3rd crossing at $117.07. Second support is the 50-day moving average crossing at $115.37.

The September British Pound was lower overnight. The low-range overnight trade sets the stage for a steady to lower opening when the day session beings trading. Stochastics and the RSI are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the August 4^th low crossing at 1.2984 are needed to confirm that a short-term top has been posted. If September resumes the rally off June’s low, the December-2019 high crossing at 1.3453 is the next upside target. First resistance is Wednesday’s high crossing at 1.3269. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4^th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2759.

The September Swiss Franc was lower in overnight trading. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 12^th low crossing at 1.0881 would confirm that a short-term top has been posted. If September resumes the rally off April’s low, the 62% retracement level of the 2018-2020 decline crossing at 1.1178 is the next upside target. First resistance is Tuesday’s high crossing at 1.1108. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 12^th low crossing at 1.0881. Second support is the August 3rd low crossing at 1.0829.

The September Canadian Dollar was steady to slightly lower overnight. The low-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 75.21 would confirm that a short-term top has been posted. If September extends the rally off March’s low, January’s high crossing at 77.16 is the next upside target. First resistance is the 87% retracement level of the January-March-decline crossing at 76.04. Second resistance is January’s high crossing at 77.16. First support is the 20-day moving average crossing at 75.21. Second support is the 50-day moving average crossing at 74.33.

The September Japanese Yen was higher overnight as it consolidates some of Wednesday’s decline. The mid-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off last-week’s low, July’s high crossing at 0.0960 is the next upside target. Closes below the 50-day moving average crossing at 0.0939 would signal that a short-term top has been posted. First resistance is July’s high crossing at 0.0960. Second resistance is the 75% retracement level of March’s decline crossing at 0.0968. First support is August’s low crossing at 0.0934. Second support is the July 20^th low crossing at 0.0930. Third support is July’s low crossing at 0.0925.

PRECIOUS METALS: October gold was lower overnight due in part to strength in the U.S. Dollar. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If October renews the decline off August’s high, the 50-day moving average crossing at $1873.80 is the next downside target. If October resumes the rally off last-week’s low, August’s high crossing at $2078.00 is the next upside target. First resistance is Tuesday’s high crossing at $2016.60. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1873.80. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.

September silver was lower overnight. The low-range overnight trade sets the stage for a steady to slightly higher opening when the day session begins trading later this morning. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. If September renews the rally off June’s low, the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727 is the next upside target. First resistance is August’s high crossing at $29.915. Second resistance is the the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727. First support is last-Wednesday’s low crossing at $23.580. Second support is the 38% retracement level of March-August-rally crossing at $22.973.

September copper was lower due to profit taking overnight signaling a possible end to the rally off last-Thursday’s low. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower trading is possible near-term. Closes below last-Thursday’s low crossing at 2.7690 would confirm that a short-term top has been posted. If September extends the rally off August’s low, the 75% retracement level of the 2018-2020 decline crossing at 3.0598 is the next upside target. First resistance is Wednesday’s high crossing at 3.0295. Second resistance is the 75% retracement level of the 2018-2020 decline crossing at 3.0598. First support is last-Thursday’s low crossing at 2.7690. Second support is July’s low crossing at 2.7035.

GRAINS: December corn was higher overnight. The high-range trade sets the stage for a steady to higher opening when the day sessions begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at $3.30 3/4 would signal that a short-term top has been posted. If December renews this month’s rally, the June 8^th high crossing at $3.48 1/2 is the next upside target. First resistance is the June 8^th high crossing at $3.48 1/2. Second resistance is the 38% retracement level of the 2019-2020 decline crossing at $3.59 3/4. First support is the 50-day moving average crossing at $3.37. Second support is the 20-day moving average crossing at $3.30 3/4.

December wheat was higher overnight as it extends the rally off August’s low. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August’s low, the July 31^st high crossing at $5.42 is the next upside target. Closes below the 10-day moving average crossing at $5.14 1/4 would signal that a short-term top has been posted. First resistance is the July 31^st high crossing at $5.42. Second resistance is the July 24^th high crossing at $5.48 3/4. First support is August’s low crossing at $4.97. Second support is June’s low crossing at $4.79 1/2.

December Kansas City wheat was higher overnight as it extends the rally off August’s low. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the aforementioned rally, the July 24^th high crossing at $4.65 1/2 is the next upside target. Closes below the 10-day moving average crossing at $4.40 would signal that a short-term top has been posted. First resistance is the July 24^th high crossing at $4.65 1/2. Second resistance is July’s high crossing at $4.74 3/4. First support is the 10-day moving average crossing at $4.40. Second support is August’s low crossing at $4.20 3/4.

December Minneapolis wheat was higher overnight as it extends the rally off August’s low. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $5.26 3/4 would open the door for additional gains near-term. Closes below the 10-day moving average crossing at $5.17 would temper the near-term friendly outlook. First resistance is the 50-day moving average crossing at $5.26 3/4. Second resistance is the reaction high crossing at $5.33 1/2. First support is the 10-day moving average crossing at $5.17. Second support is August’s low crossing at $5.06 1/2.

November soybeans was steady to fractionally lower overnight. The low-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $8.88 would confirm that a short-term top has been posted. If November extends this month’s rally, the 62% retracement level of the January-April-decline crossing at $9.24 3/4 is the next upside target. First resistance is Wednesday’s high crossing at $9.19 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.24 3/4. First support is the 20-day moving average crossing at $8.91 3/4. Second support is the 50-day moving average crossing at $8.88.

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

Thursday, August 20–Jim Wyckoff’s Morning Markets Report

Note: I am on vacation this week. My friend and fellow analyst Ken Seehusen is producing my morning and afternoon reports. Ken’s format is a bit different than mine, but I think you will enjoy and benefit from his work.

The STOCK INDEXES:The September NASDAQ 100 was lower overnight after the U.S. central bank gave a somewhat discouraging economic outlook and largely ruled out one way to address it. The high-range trade sets the stage for a steady to slightly lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends this year’s rally into uncharted territory upside targets will be hard to project. Closes below the 20-day moving average crossing at 11,029.63 would confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 11,438.00. Second resistance is unknown. First support is the 20-day moving average crossing at 11,029.63. Second support is the 50-day moving average crossing at 10,602.70.

The September S&P 500 was lower due to profit taking overnight following this week’s test of February’s high crossing at 3393.52. The high-range overnight trade sets the stage for a steady to slightly lower opening when the day session begins trading later this morning. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above February’s high crossing at 3393.52 would open the door into uncharted territory. Closes below the 20-day moving average crossing at 3307.94 would confirm that a short-term top has been posted. First resistance is February’s high crossing at 3393.52. Second resistance is unknown. First support is the 20-day moving average crossing at 3307.94. Second support is the 50-day moving average crossing at 3200.90.

INTEREST RATES: September T-bonds were higher overnight as they consolidate below the January-June uptrend line crossing near 179-18. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 180-13 would confirm that a short-term low has been posted. If September resumes the decline off August’s high, July’s low crossing at 177-06 is the next downside target. First resistance is the 50-day moving average crossing at 179-11. Second resistance is the 20-day moving average crossing at 180-13. First support is last-Thursday’s low crossing at 177-16. Second support is July’s low crossing at 177-06.

September T-notes were higher overnight as they consolidates some of this month’s decline. The high-range overnight trade sets the stage for a steady to higher opening with the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 139.209 would signal that a short-term low has been posted. If September resumes this month’s decline, July’s low crossing at 138.235 is the next downside target. First resistance is the 20-day moving average crossing at 139.209. Second resistance is August’s high crossing at 140.130. Third resistance is the March high on the weekly continuation chart crossing at 140.240. First support is last-Thursday’s low crossing at 139.285. Second support is July’s low crossing at 138.235.

ENERGY MARKETS: October crude oil was slightly lower overnight as it extends this month’s trading range above the 50% retracement level of the February-April-decline crossing at $46.44. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought, diverging and are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at $42.01 would confirm that a short-term top has been posted. If October renews the rally off April’s low, the 62% retracement level of the February-April-decline crossing at $46.44 is the next upside target. First resistance is the August 5th high crossing at $43.68. Second resistance is the 62% retracement level of the February-April-decline crossing at $46.44. First support is the 20-day moving average crossing at $42.01. Second support is the 50-day moving average crossing at $40.80. Third support is the July 30^th low crossing at $39.00.

October heating oil was lower overnight as it extends the July-August trading range. The low-range overnight trade sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $125.11 are needed to confirm that a short-term top has been posted. If October resumes the rally off April’s low, the 38% retracement level of the January-April-decline crossing at $133.94 is the next upside target. First resistance is August’s high crossing at $131.92. Second resistance is the 38% retracement level of the February-April-decline crossing at $133.94. First support is the 50-day moving average crossing at $125.11. Second support is the July 30^th low crossing at $119.03.

October unleaded gas was slightly lower overnight. The low-range overnight trade sets the stage for a steady to slightly lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If October renews the rally off April’s low, the 62% retracement level of the January-March-decline crossing at $130.29 is the next upside target. Closes below the 50-day moving average crossing at $114.63 would signal that a short-term top has been posted. First resistance is Wednesday’s high crossing at $122.94. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 20-day moving average crossing at $116.64. Second support is the 50-day moving average crossing at $114.63.

October Henry natural gas was lower overnight as it consolidates some of the rally off June’s low. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off July’s low, the April-2019 high crossing at 2.697 is the next upside target. Closes below the 20-day moving average crossing at 2.267 would confirm that a short-term top has been posted. First resistance is Tuesday’s high crossing at 2.598. Second resistance is the April-2019 high crossing at 2.697. First support is the 10-day moving average crossing at 2.420. Second support is the 20-day moving average crossing at 2.267.

CURRENCIES:The September Dollar was steady to slightly lower overnight. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that additional short covering gains are possible near-term. Closes above the August 3rd high crossing at $93.98 are needed to confirm that a short-term low has been posted. If September extends this year’s decline, long-term support on the monthly continuation chart crossing at 90.21 is the next downside target. First resistance is the August 3^rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.29. First support is Tuesday’s low crossing at $92.11. Second support is long-term support on the monthly continuation chart crossing at 90.21.

The September Euro was steady to slightly lower in overnight trading as it consolidates some of this month’s gains. The mid-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 3^rd low crossing at $117.07 would confirm that a short-term top has been posted. If September extends the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. First resistance is Tuesday’s high crossing at $119.73. Second resistance is the 50% retracement level of the 2018-2020 decline crossing at $120.83. First support is the August 3rd crossing at $117.07. Second support is the 50-day moving average crossing at $115.27.

The September British Pound was steady to slightly higher overnight. The high-range overnight trade sets the stage for a steady to higher opening when the day session beings trading. Stochastics and the RSI are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the August 4^th low crossing at 1.2984 would confirm that a short-term top has been posted. If September extends the rally off June’s low, the December-2019 high crossing at 1.3453 is the next upside target. First resistance is Wednesday’s high crossing at 1.3269. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4^th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2747.

The September Swiss Franc was higher in overnight trading as it consolidates some of Wednesday’s sharp decline. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 12^th low crossing at 1.0881 would confirm that a short-term top has been posted. If September resumes the rally off April’s low, the 62% retracement level of the 2018-2020 decline crossing at 1.1178 is the next upside target. First resistance is Tuesday’s high crossing at 1.1108. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 12^th low crossing at 1.0881. Second support is the August 3rd low crossing at 1.0829.

The September Canadian Dollar was steady to slightly higher overnight as it consolidates some of Wednesday’s loss. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 75.14 would confirm that a short-term top has been posted. If September extends the rally off March’s low, January’s high crossing at 77.16 is the next upside target. First resistance is the 87% retracement level of the January-March-decline crossing at 76.04. Second resistance is January’s high crossing at 77.16. First support is the 20-day moving average crossing at 75.14. Second support is the 50-day moving average crossing at 74.28.

The September Japanese Yen was higher overnight as it consolidates some of Wednesday’s decline. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off last-week’s low, July’s high crossing at 0.0960 is the next upside target. Closes below the 50-day moving average crossing at 0.0938 would signal that a short-term top has been posted. First resistance is July’s high crossing at 0.0960. Second resistance is the 75% retracement level of March’s decline crossing at 0.0968. First support is August’s low crossing at 0.0934. Second support is the July 20^th low crossing at 0.0930. Third support is July’s low crossing at 0.0925.

PRECIOUS METALS: October gold was slightly lower overnight as it extends Wednesday’s decline. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI have turned neutral to bearish signaling that sideways to lower prices are possible near-term. If October renews the decline off August’s high, the 50-day moving average crossing at $1869.60 is the next downside target. If October resumes the rally off last-week’s low, August’s high crossing at $2078.00 is the next upside target. First resistance is Tuesday’s high crossing at $2016.60. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1869.60. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.

September silver was higher overnight. The low-range overnight trade sets the stage for a steady to slightly higher opening when the day session begins trading later this morning. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. If September renews the rally off June’s low, the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727 is the next upside target. First resistance is August’s high crossing at $29.915. Second resistance is the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727. First support is last-Wednesday’s low crossing at $23.580. Second support is the 38% retracement level of March-August-rally crossing at $22.973.

September copper was lower due to profit taking overnight signaling a possible end to the rally off last-Thursday’s low. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher trading is possible near-term. If September extends the rally off August’s low, the 75% retracement level of the 2018-2020 decline crossing at 3.0598 is the next upside target. Closes below last-Thursday’s low crossing at 2.7690 would confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 3.0295. Second resistance is the 75% retracement level of the 2018-2020 decline crossing at 3.0598. First support is last-Thursday’s low crossing at 2.7690. Second support is July’s low crossing at 2.7035.

GRAINS:December corn was lower overnight as it consolidates some of the rally off August’s low. Traders will be watching this morning’s weekly export report from USDA for short-term direction. The USDA is expected to show corn sales ranging between 19.7 million and 53.1 million bushels. Actuals will need to come in on the high end of those estimates to best the prior week’s tally. The low-range trade sets the stage for a steady to lower opening when the day sessions begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at $3.30 1/2 would signal that a short-term top has been posted. If December renews this month’s rally, the June 8^th high crossing at $3.48 1/2 is the next upside target. First resistance is the June 8^th high crossing at $3.48 1/2. Second resistance is the 38% retracement level of the 2019-2020 decline crossing at $3.59 3/4. First support is the 50-day moving average crossing at $3.37. Second support is the 20-day moving average crossing at $3.30 1/2.

December wheat was lower overnight as it extends this week’s back and forth trading. The low-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August’s low, the July 31^st high crossing at $5.42 is the next upside target. Closes below the 10-day moving average crossing at $5.10 1/2 would signal that a short-term top has been posted. First resistance is the July 31^st high crossing at $5.42. Second resistance is the July 24^th high crossing at $5.48 3/4. First support is August’s low crossing at $4.97. Second support is June’s low crossing at $4.79 1/2.

December Kansas City wheat was lower overnight. The low-range close sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $4.50 1/4 would open the door for additional gains near-term. Closes below the 10-day moving average crossing at $4.36 1/2 would signal that a short-term top has been posted. First resistance is the 50-day moving average crossing at $4.50 1/4. Second resistance is the reaction high crossing at $4.65 1/2. First support is August’s low crossing at $4.20 3/4. Second support is weekly support crossing at $4.12.

December Minneapolis wheat was lower overnight as it consolidates some of the rally off August’s low. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $5.27 would open the door for additional gains near-term. Closes below the 10-day moving average crossing at $5.14 1/4 would temper the near-term friendly outlook. First resistance is the 50-day moving average crossing at $5.27. Second resistance is the reaction high crossing at $5.33 1/2. First support is the 10-day moving average crossing at $5.14 1/4. Second support is August’s low crossing at $5.06 1/2.

November soybeans was lower overnight on expectations that massive yields are still likely this fall, although another large sale to China reported this morning kept losses minimized. Private exporters reported to USDA the sale of 7.1 million bushels of soybeans for delivery to China during the 2020/21 marketing year, which begins September 1. Today’s USDA weekly grain export data is expect to show soybean sales ranging between 84.5 million and 143.3 million bushels for the week ending August 13. The low-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If November extends this month’s rally, the 62% retracement level of the January-April-decline crossing at $9.24 3/4 is the next upside target. Closes below the 50-day moving average crossing at $8.87 1/2 would confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at $9.19 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.24 3/4. First support is the 20-day moving average crossing at $8.91 1/4. Second support is the 50-day moving average crossing at $8.87 1/2.

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