The value of the U.S. dollar continues to depreciate on the world foreign exchange market. The U.S. dollar index–a basket of six major currencies weighted against the greenback–has hit a more-than-two-year low this week. Yet, the U.S. stock indexes continue to rally and are at or near record highs. Such may not be a good combination for financial and economic activity in the coming weeks and months. The gold and silver market bulls may have already been trading this notion as those precious metals prices rally in part on safe-haven demand. Stay tuned!– Jim
Daily Morning Report
U.S dollar continues to depreciate as U.S. stocks gain
Tuesday, August 18–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 higher overnight and posted a new all-time high as it extends this year’s rally. 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 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 10,963.64 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 11,328.25. Second resistance is unknown. First support is the 20-day moving average crossing at 10,963.64. Second support is the 50-day moving average crossing at 10,548.33.
The September S&P 500 was higher overnight and is poised to test February’s high crossing at 3387.60. The high-range overnight trade sets the stage for a steady to higher 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 3387.60 would open the door into uncharted territory. Closes below the 20-day moving average crossing at 3295.80 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 3387.00. Second resistance is February’s high crossing at 3387.60. First support is the 20-day moving average crossing at 3295.80. Second support is the 50-day moving average crossing at 3193.93.
Interest Rates: September T-bonds were steady to slightly higher in overnight trading as they consolidate some of the decline off August’s high. The low-range overnight trade sets the stage for steady to slightly higher opening is possible when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that a short-term top. If September extends the decline off August’s high, July’s low crossing at 177-06 is the next downside target. Closes above the 20-day moving average crossing at 180-20 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 180-20. Second resistance is August’s high crossing at 183-06. 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 steady to slightly higher overnight as they consolidates some of this month’s decline. The low-range overnight trade sets the stage for a steady to slightly higher opening with 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 139.214 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 August’s high crossing at 140.130. Second 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.
Energies: October crude oil was steady to slightly lower overnight. 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 becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the 50-day moving average crossing at $40.66 would confirm that a short-term top has been posted. If October extends 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 50-day moving average crossing at $40.66. Second support is the July 30th low crossing at $39.00.
October heating oil was steady to slightly higher overnight. The high-range overnight trade sets the stage for a steady to slightly 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. 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. Closes below the 50-day moving average crossing at $124.94 are needed to confirm that a short-term top has been posted. 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 $124.94. Second support is the July 30th low crossing at $119.03.
October unleaded gas was lower overnight as it consolidated some of Monday’s rally, which posted an upside breakout of the June-August trading range. 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 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 $114.29 would temper the near-term friendly outlook. First resistance is Monday’s high crossing at $122.65. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 50-day moving average crossing at $114.29. Second support is the July 30th low crossing at $106.14.
October Henry natural gas was slightly higher overnight as it extends the rally off June’s low above the 87% retracement level of the May-June-decline crossing at 2.273. The high-range overnight trade sets the stage for a steady to slightly 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 October extends the rally off June’s low, May’s high crossing at 2.588 is the next upside target. Closes below the 20-day moving average crossing at 2.199 would confirm that a short-term top has been posted. First resistance is Monday’s high crossing at 2.525. Second resistance is May’s high crossing at 2.588. First support is the 10-day moving average crossing at 2.368. Second support is the 20-day moving average crossing at 2.199.
Currencies: The September Dollar was lower overnight and spiked to a new contract 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 have turned neutral to bearish signaling that sideways to lower prices are possible near-term. If September renews this year’s decline, the May 14th 2018-low on the weekly continuation chart crossing at 92.12 is the next downside target. Closes above the August 3rd high crossing at $93.98 are needed to confirm that a short-term low has been posted. First resistance is the August 3rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.43. First support is the overnight low crossing at $92.45. Second support is weekly support on the weekly continuation chart marked by the May 14th 2018 low crossing at 92.12.
The September Euro was higher in overnight trading as it extends the trading range of the past four-weeks. 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 June renews the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. Closes below the August 3rd low crossing at $117.07 would signal that a short-term top has been posted. First resistance is the August 6th high crossing at $119.26. 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 $115.08.
The September British Pound was higher overnight while extending the trading range of the past four-weeks. 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 bullish signaling that sideways to higher prices are possible near-term. If September resumes the rally off June’s low, the December-2019 high crossing at 1.3453 is the next upside target. Closes below the August 4th low crossing at 1.2984 would signal that a short-term top has been posted. First resistance is the 87% retracement level of the December-March decline crossing at 1.3193. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2730.
The September Swiss Franc was steady to slightly higher in overnight trading as it renewed the rally off March’s low. 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 overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. 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. Closes below the August 3rd low crossing at 1.0829 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 1.1074. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 3rd low crossing at 1.0829. Second support is the 50-day moving average crossing at 1.0742.
The September Canadian Dollar was higher overnight as it extends the rally off March’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 overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off March’s low, January’s high crossing at 77.16 is the next upside target. Closes below the 20-day moving average crossing at 75.03 would confirm that a short-term top has been posted. 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 75.03. Second support is the 50-day moving average crossing at 74.24.
The September Japanese Yen was higher overnight as it extends the rally off last-week’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 turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 0.0942 would signal that a short-term low has been posted. If September renews this month’s decline, the July 20th low crossing at 0.0930 is the next downside target. 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 the July 20th low crossing at 0.0930. Second support is July’s low crossing at 0.0925.
Precious Metals: October gold was higher overnight as it extends the rally off last-Wednesday’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 have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing at $1988.80 would signal that a short-term low has been posted. If October renews the decline off August’s high, the 50-day moving average crossing at $1862.40 is the next downside target. First resistance is the 10-day moving average crossing at $1988.80. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1862.40. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.
September silver was higher overnight as it extends the rally off last-Wednesday’s low. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading later this morning. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. 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. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. 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.
Grains: December corn was lower overnight as it consolidates some of the rally off August’s low. Monday’s crop condition report showed a two-point decline, with 69% of the crop now rated in good-to-excellent condition. However, traders were expecting a three-point drop, which led to the overnight weakness. States hit hardest by last-Monday’s storms saw the biggest declines. For example Iowa, fell ten points to 59% in good-to-excellent condition. The high-range trade sets the stage for a steady to slightly lower opening when the day sessions 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 this month’s rally, the 25% retracement level of the 2019-2020 decline crossing at $3.46 is the next upside target. Closes below the 20-day moving average crossing at $3.30 1/4 would signal that a short-term top has been posted. First resistance is the July 13th gap crossing at $3.43 3/4. Second resistance is the 25% retracement level of the 2019-2020 decline crossing at $3.46. First support is the 50-day moving average crossing at $3.37 1/4. Second support is the 20-day moving average crossing at $3.30 1/4.
December wheat was lower overnight as it consolidates some of Monday’s rally. 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 31st high crossing at $5.42 is the next upside target. Closes below the 10-day moving average crossing at $5.09 1/2 would signal that a short-term top has been posted. First resistance is the July 31st high crossing at $5.42. Second resistance is the July 24th high crossing at $5.48 3/4. First support is last-Wednesday’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 as it consolidates some of the rally off August’s low. 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 $4.51 3/4 would open the door for additional gains near-term. If December resumes the decline off July’s high, weekly support crossing at $4.12 is the next downside target. First resistance is the 50-day moving average crossing at $4.51 3/4. 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. 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 bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August’s low, the 50-day moving average crossing at $5.27 3/4 is the next upside target. If December renews this year’s decline, psychological support crossing at $5.00 is the next downside target. First resistance is the 50-day moving average crossing at $5.27 3/4. Second resistance is the reaction high crossing at $5.33 1/2. First support is August’s low crossing at $5.06 1/2. Second support is psychological support crossing at $5.00.
November soybeans was lower overnight as it consolidated some of Monday’s gains. The mid-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 $8.86 would confirm that a short-term top has been posted. First resistance is Monday’s high crossing at $9.17 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.24 3/4. First support August’s low crossing at $8.65 1/4. Second support is the June 29th low crossing at $8.56 3/4 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
U.S. stocks set to open higher Monday
Monday, August 17–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 higher overnight after the U.S. and China decided to delay trade talks on reviewing the Phase 1 trade agreement. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are diverging 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 10,935.50 would confirm that a short-term top has been posted. First resistance is the August 8th high crossing at 11,283.25. Second resistance is unknown. First support is the 20-day moving average crossing at 10,935.50. Second support is the 50-day moving average crossing at 10,517.46.
The September S&P 500 was higher overnight as it extends last week’s trading range. The high-range overnight trade sets the stage for a steady to higher 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. If September extends the rally off March’s low, February’s high crossing at 3387.60 is the next upside target. Closes below the 20-day moving average crossing at 3289.07 would confirm that a short-term top has been posted. First resistance is last-Wednesday’s high crossing at 3382.00. Second resistance is February’s high crossing at 3387.60. First support is the 20-day moving average crossing at 3289.07. Second support is the 50-day moving average crossing at 3189.87.
INTEREST RATES: September T-bonds were higher in overnight trading as they consolidate some of the decline off August’s high. The mid-range overnight trade sets the stage for steady to higher opening is possible when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that a short-term top. If September extends the decline off August’s high, July’s low crossing at 177-06 is the next downside target. Closes above the 20-day moving average crossing at 180-23 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 180-23. Second resistance is August’s high crossing at 183-06. First support is 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 mid-range overnight trade sets the stage for a steady to higher opening with the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If September extends this month’s decline, July’s low crossing at 138.235 is the next downside target. Closes above the 20-day moving average crossing at 139.216 would signal that a short-term low has been posted. First resistance is August’s high crossing at 140.130. Second resistance is March’s 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 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 bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $40.56 would confirm that a short-term top has been posted. If October extends 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 50-day moving average crossing at $40.56. Second support is the July 30th low crossing at $39.00.
October heating oil was steady to 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 turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $124.76 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 $124.76. Second support is the July 30th low crossing at $119.03.
October unleaded gas was higher overnight signaling a potential upside breakout of the June-August trading range. The low-range overnight trade sets the stage for a steady to slightly 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 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 $114.08 would temper the near-term friendly outlook. First resistance is the overnight high crossing at $122.65. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 50-day moving average crossing at $114.08. Second support is the July 30th low crossing at $106.14.
October Henry natural gas was higher overnight as it extends the rally off June’s low above the 62% retracement level of the May-June-decline crossing at 2.247. The low-range overnight trade sets the stage for a steady to slightly 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 October extends the rally off June’s low, May’s high crossing at 2.588 is the next upside target. Closes below the 20-day moving average crossing at 2.167 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 2.525. Second resistance is May’s high crossing at 2.588. First support is the 10-day moving average crossing at 2.353. Second support is the 20-day moving average crossing at 2.167.
CURRENCIES: The September Dollar was slightly lower overnight as it extends this month’s trading range. 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. If September renews this year’s decline, the May 14th 2018-low on the weekly continuation chart crossing at 92.12 is the next downside target. Closes above the August 3rd high crossing at $93.98 are needed to confirm an upside breakout of the aforementioned trading range. First resistance is the August 3rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.51. First support is August’s low crossing at $92.48. Second support is weekly support on the weekly continuation chart marked by the May 14th 2018 low crossing at 92.12.
The September Euro was steady to slightly higher in overnight trading as it extends the trading range of the past four-weeks. 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 turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. Closes below the August 3rd low crossing at $117.07 would signal that a short-term top has been posted. First resistance is the August 6th high crossing at $119.26. 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 $114.96.
The September British Pound was lower overnight while extending the trading range of the past four-weeks. 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 neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 4th low crossing at 1.2984 would signal 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 the 87% retracement level of the December-March decline crossing at 1.3193. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2721.
The September Swiss Franc was steady to slightly higher in overnight trading as it extends the trading range of the past four-weeks. 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 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. Closes below the August 3rd low crossing at 1.0829 would confirm that a short-term top has been posted. First resistance is the August 6th high crossing at 1.1062. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 3rd low crossing at 1.0829. Second support is the 50-day moving average crossing at 1.0730.
The September Canadian Dollar was higher overnight and working on a possible inside day. 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, diverging and are turning neutral to bearish signaling that a short-term top might be in or is near. If September extends the rally off March’s low, the 87% retracement level of the January-March-decline crossing at 76.04 is the next upside target. Closes below the 20-day moving average crossing at 74.94 would confirm that a short-term top has been posted. First resistance is last-Thursday’s high crossing at 75.81. Second resistance is the 87% retracement level of the January-March-decline crossing at 76.04. First support is the 20-day moving average crossing at 74.94. Second support is the 50-day moving average crossing at 74.21.
The September Japanese Yen was steady to slightly higher overnight as it consolidates some of the decline off July’s high. 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 remain neutral to bearish signaling that sideways to lower prices are possible near-term. If September extends this month’s decline, the July 20th low crossing at 0.0930 is the next downside target. Closes above the 20-day moving average crossing at 0.0943 would signal that a short-term low 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 the July 20th low crossing at 0.0930. Second support is July’s low crossing at 0.0925.
PRECIOUS METALS: October gold was higher overnight as it consolidates some of its declines off August’s high. 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 10-day moving average crossing at $1988.00 would signal that a short-term low has been posted. If October renews the decline off August’s high, the 50-day moving average crossing at $1856.00 is the next downside target. First resistance is the 10-day moving average crossing at $1988.00. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1856.00. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.
September silver was higher overnight as it consolidates some of last-Friday’s decline. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading later this morning. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. 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. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. 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 higher overnight. 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 signaling that sideways to higher trading is possible near-term. Closes above the 20-day moving average crossing at 2.8908 would signal that a short-term low has been posted. If September extends the decline off July’s high, the 25% retracement level of the March-July-rally crossing at 2.7419 is the next downside target. First resistance is the July 13th high crossing at 2.9930. Second resistance is the 75% retracement level of the 2018-2020 decline crossing at 3.0598. First support is the 50-day moving average crossing at 2.7968. Second support is the 25% retracement level of the March-July-rally crossing at 2.7419.
GRAINS: December corn gapped up and was higher overnight as it extends last-week’s short covering rally. Stronger old and new-crop demand, which lowered this year’s projected ending stocks helped to trigger last week’s short covering rally. Also last week’s Derecho storm that cause significant damage to the corn crop across portions of Iowa, Wisconsin, portions of Illinois could reduce this year’s ending stocks by 50 to 300 million bushels when this year’s final crop size is determined. One more factor that has yet to garner much attention is much of Iowa along with portions of the eastern corn belt are in need to rain and soon or further yield losses appear likely. The high-range trade sets the stage for a steady to higher opening when the day sessions begins trading. Stochastics and the RSI are becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends this month’s rally, the July 13th gap crossing at $3.43 3/4 is the next upside target. Closes below the 10-day moving average crossing at $3.28 would signal that this month’s rally has ended. If December renews the decline off July’s high, weekly support crossing at $3.00 1/4 is the next downside target. First resistance is the July 13th gap crossing at $3.43 3/4. Second resistance is July’s high crossing at $3.63. First support is last-Wednesday’s low crossing at $3.20. Second support is weekly support crossing at $3.00 1/4.
December wheat was higher overnight as it consolidates some of the decline off July’s high. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at $5.21 3/4 would signal that a short-term low has been posted. If December renews the decline off July’s high, June’s low crossing at $4.79 1/2 is the next downside target. First resistance is the 50-day moving average crossing at $5.17. Second resistance is the 20-day moving average crossing at $5.21 3/4. First support is last-Wednesday’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 mid-range close 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. Closes above the 20-day moving average crossing at $4.42 would signal that a short-term low has been posted. If December resumes the decline off July’s high, weekly support crossing at $4.12 is the next downside target. First resistance is the 20-day moving average crossing at $4.42. Second resistance is the 50-day moving average crossing at $4.52 1/4. 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 higher overnight. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at $5.18 would signal that a short-term low has been posted. If December renews this year’s decline, psychological support crossing at $5.00 is the next downside target. First resistance is the 20-day moving average crossing at $5.18. Second resistance is the 50-day moving average crossing at $5.28 1/2. First support is August’s low crossing at $5.06 1/2. Second support is psychological support crossing at $5.00.
November soybeans gapped up and were higher overnight as they extend the short covering rally off last-Monday’s low. Strong export demand along with persistent dryness across large portions of Iowa and portions of the eastern corn belt are helping to underpin the rally off August’s low. The high-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, July’s high crossing at $9.12 1/2 is the next upside target. Closes below the 10-day moving average crossing at $8.84 would confirm that a short-term top has been posted. First resistance is July’s high crossing at $9.12 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.25 1/4. First support August’s low crossing at $8.65 ¼. Second support is the June 29th low crossing at $8.56 3/4 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
Corn, soybean bulls back in business
The corn and soybean futures markets this week absorbed bearish USDA monthly supply and demand data, released Wednesday, and still traded solidly higher in its aftermath. Such suggests all the bearish news in the grain markets may now be factored into prices and that those two markets can trade at least sideways, if not sideways to higher, in the coming weeks. Corn and soybean bulls are back in business, and if those markets rally, wheat will likely follow. It could also be that many traders are viewing the grains as value-buying opportunities at lower levels. Stay tuned!– Jim
Traders mostly upbeat ahead of key U.S. retail sales data
Friday, August 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight, with European indexes mostly down and Asian bourses mostly up. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk appetite is still mostly upbeat to end the trading week, even though Covid-19 infections around the globe are worrisomely high and the U.S. Congress has stalled out on providing any further relief for Americans.
The U.S. economic data point of the day will be the retail sales report for July, which is expected to come in at up 2.3% from June, following a 7.5% rise seen in June.
Traders and investors will be closely watching the weekend meeting between U.S. and China trade officials, in which they will assess the “phase 1” trade deal reached in January. Many are wondering if the meeting will be cordial, given the harsh rhetoric exchanged between the world’s two largest economies in recent months.
In overnight news, the Euro zone second-quarter GDP came in at down 12.1% from the first quarter and down 15.0%, year-on-year. Those numbers were right in line with market expectations, but still dour by historical standards.
The important outside markets today see Nymex crude oil prices weaker and trading around $42.00 a barrel. The U.S. dollar index is slightly lower. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 0.69%.
Other U.S. economic data due for release Friday includes preliminary productivity and costs, manufacturing and trade inventories and sales, the University of Michigan consumer sentiment survey, and industrial production and capacity utilization.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are modestly lower in early U.S. trading, on profit taking, but still close to the record high scored in February. Bulls have the solid overall near-term technical advantage amid a 4.5-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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,382.50 and then at the record high of 3,396.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,319.50 and then at 3,300.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading. Bulls remain in solid overall technical control. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 this week’s high of 11,266.00 and then at last week’s record high of 11,283.25. On the downside, shorter-term support is seen at 11,000.00 and then at this week’s low of 10,845.50. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading, on a corrective rebound from this week’s solid losses. Bulls have the overall near-term chart advantage but have faded this week to begin to suggest a near-term market top is in place. 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 technical resistance is seen at 179 even and then at 179 20/32. Shorter-term support lies at this week’s low of 177 16/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the near-term technical advantage but have faded this week. 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 Thursday’s high of 139.14.0 and then at 139.20.0. Shorter-term technical support lies at this week’s low of 138.28.5 and then at 138.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading. Bulls 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 below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance this week’s high of 1.1872 and then at at the August high of 1.1926. Shorter-term support is seen at the overnight low of 1.1788 and then at 1.1750. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are modestly down in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $42.94 and then at the August high of $43.52. Look for sell stops just below technical support at $41.50 and then at this week’s low of $41.17. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mostly weaker in early U.S. pre-market trading, on corrective pullbacks from the solid and impressive gains seen in corn and soybeans late this week. Importantly, the grain futures markets this week absorbed bearish USDA monthly supply and demand data, released Wednesday, and still traded mostly higher. Such suggests all the bearish news in the grain markets may now be factored into prices. Corn and soybean bulls are back in business, and if those markets rally, wheat will likely follow. It could also be that many traders are viewing the grains as value-buying opportunities at lower levels.
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
Marketplace not so upbeat Thursday
Thursday, August 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading and the U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Focus Thursday is on the weekly U.S. jobless claims report, which is expected to show new claims at 1.1 million in the latest week. Traders and investors will scrutinize the jobs data to try to gauge the pace of the U.S. economic recovery, or lack thereof. Also somewhat downbeat for the marketplace today are reports the U.S. Democrats and Republicans in Congress are still far apart on any new stimulus package for Americans. And Boston Federal Reserve President Eric Rosengren warned Thursday that Americans not adhering to guidelines issued by health officials will prolong the U.S. economic downturn.
Gold and silver prices are still a bit wobbly after Tuesday’s huge losses. However, prices are presently well up from this week’s lows, which are key price support levels that bulls must defend to keep the gold and silver near-term price uptrends in place.
The important outside markets today see Nymex crude oil prices near steady and trading around $42.65 a barrel. The U.S. dollar index is lower. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 0.66%.
U.S. economic data due for release Thursday includes the weekly jobless claims report and import and export prices.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading but still close to the record high scored in February. Bulls have the solid overall near-term technical advantage amid a 4.5-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 neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 3,382.50 and then at the record high of 3,396.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,319.50 and then at 3,300.00. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are weaker in early U.S. trading. Bulls remain in solid overall technical control. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 11,185.75 and then at last week’s record high of 11,283.25. On the downside, shorter-term support is seen at 11,000.00 and then at this week’s low of 10,845.50. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. Bulls have the overall near-term chart advantage but have faded badly this week to suggest a near-term market top is in place. 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 technical resistance is seen at the overnight high of 179 20/32 and then at 179 31/32. Shorter-term support lies at this week’s low of 178 8/32 and then at 178 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls still have the near-term technical advantage but have faded this week. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 139.16.0 and then at 139.20.0. Shorter-term technical support lies at this week’s low of 139.00.0 and then at 138.26.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are higher in early U.S. trading. Bulls 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 below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the August high of 1.1926 and then at 1.1950. Shorter-term support is seen at the overnight low of 1.1791 and then at 1.1750. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-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 this week’s high of $42.94 and then at the August high of $43.52. Look for sell stops just below technical support at $41.53 and then at this week’s low of $41.17. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are higher in early U.S. pre-market trading. Importantly, the grain futures markets on Thursday absorbed bearish USDA monthly supply and demand data and still traded mostly higher. Such suggests all the bearish news in the grain markets may now be factored into prices. Such does not suggest price uptrends are imminent but it does suggest there is very limited downside price potential at current levels. It could also be that many traders are viewing the grains as value-buying opportunities at lower levels.
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