The gold market this week hit a 10-month high and prices are in a solid uptrend on the daily bar chart. The bulls have good technical power to suggest more price gains in the near term. There are no early chart clues to suggest a market top is close at hand. Stay tuned!
Daily Morning Report
U.S.-China Trade Deal May Be Within Reach; Marketplace Upbeat
Thursday, February 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock indexes remain in near-term price uptrends and they are near their recent 2.5-month highs.
There are new reports out today that the ongoing U.S.-China trade talks, taking place this week in Washington, D.C., are going well. That’s allowing a bit more trader and investor risk appetite to be present in the marketplace. Reuters reported late Wednesday that U.S. and China officials are outlining a deal to end the trade war. The report said agreements in principle are being drawn up in six major areas. Reports also said U.S. President Trump and Chinese President Jinping may hold a summit in March to finalize the deal.
The marketplace has mostly digested the Federal Reserve’s Open Market Committee (FOMC) meeting minutes, released Wednesday afternoon. The minutes expressed some more concern regarding risks to U.S. economic growth, which the Fed says has moderated in recent months. The Fed saw few risks in leaving U.S. monetary policy steady, at present. The minutes also said the Fed will exercise “patience” on future interest rate hikes. Markets showed no significant price reactions to the report.
In overnight news, the European Union received some more downbeat economic news when the February manufacturing purchasing managers’ index (PMI) came in at 49.2 versus expectations for a reading of 50.5. A number below 50.0 suggests contraction in the sector.
The key outside markets today see the U.S. dollar index slightly higher after seeing a corrective pullback this week after hitting a two-month high last Friday. Nymex crude oil prices are firmer and hit another three-month overnight, and are trading around $57.50 a barrel.
U.S. economic reports due for release Thursday include the weekly jobless claims report, durable goods orders, the Philadelphia Fed business survey, the U.S. flash services and manufacturing purchasing managers’ indexes, leading economic indicators, existing home sales and the weekly DOE liquid energy stocks report.
–Jim
Trader/Investor Optimism Upticks Slightly at Mid-Week
Wednesday, February 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The U.S. stock indexes remain in near-term price uptrends and they are near their recent 2.5-month highs.
At mid-week there appears to be slightly more optimism in the ongoing U.S.-China trade talks, taking place this week in Washington, D.C. President Trump on Tuesday said there could be flexibility on the early-March deadline for more U.S. trade tariffs to be imposed on China. Ideas are still widely mixed on whether any final deal will be reached any time soon. China’s state media Wednesday said there would be catastrophic economic consequences if the U.S. slapped new sanctions on China.
The U.S. economic data point of the day is the Federal Reserve’s FOMC minutes that are due out in the afternoon. The minutes will be closely scrutinized by traders and investors. The recent change in Fed policy stance to one of more accommodative monetary conditions has been a significantly bullish underlying factor for several commodity markets, including the precious metals. It’s also been bullish for world stock and bond markets.
The U.K. Brexit saga continues to play out, as four MP’s that were aligned with Prime Minister Theresa May dropped their affiliation with her. There is still no deal in place as the late-March deadline approaches for the U.K. to leave the European Union.
The key outside markets today see the U.S. dollar index slightly higher after seeing a corrective pullback Tuesday, after hitting a two-month high last Friday. Nymex crude oil prices are slightly lower after hitting a three-month high on Tuesday. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.
Other U.S. economic reports due for release Wednesday include the MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.
–Jim
Nymex Crude Oil Bulls Restart Price Uptrend
The Nymex crude oil futures market early this week has hit a three-month high and is in the process of pushing prices above a major technical resistance area around and just above $55.00 a barrel. The bulls have restarted a price uptrend on the daily bar chart and they have momentum to suggest prices will continue to grind sideways to higher in the near term. Stay tuned!
Traders and Investors Not So Upbeat This Week
Tuesday, February 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, following a three-day U.S. holiday weekend. Traders and investors are not as upbeat this week as last, even though there are no major fresh news developments in the markets.
The ongoing U.S.-China trade talks taking place this week in Washington, D.C. will be closely monitored by the world marketplace. Ideas are mixed on a final deal being reached by the U.S.-imposed early-March deadline.
The U.K. Brexit saga continues to play out, with no deal in place as the late-March deadline approaches for that country to leave the European Union.
Slowing Chinese economic growth is also a bit worrisome for the marketplace.
Gold prices hit a 10-month high overnight on technical buying and amid ideas of easier monetary policies being put in place by the world’s major central banks. The Federal Reserve’s FOMC minutes are due out Wednesday afternoon and will be closely scrutinized by traders and investors.
The key outside markets today see the U.S. dollar index near steady and seeing a mild corrective pullback after hitting a two-month high on Friday. Nymex crude oil prices are higher, hit a three-month high and are trading just above $56.00 a barrel. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.
U.S. economic reports due for release Tuesday is light and includes the NAHB housing market index.
–Jim
Wheat Market Bulls Biding Their Time Amid Basing Action
The wheat futures market, as well as the corn market, have been trading in sideways and choppy ranges at lower levels for several weeks. It’s likely that this price action is “basing” that will at some point set off price uptrends. As for as timing for an upside “breakout” from the basing area, of course nobody knows. My bias is that any upside breakout would occur in April or May. Stay tuned!