Daily Morning Report

Wednesday, August 16–Jim Wyckoff’s morning markets report

Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock indexes are pointed to mixed openings when the New York day session begins. Trader and investor attitudes remain more risk averse at mid-week.

Focus remains on China’s economy. In China, the new property prices decline accelerated in July, highlighting ongoing challenges in one of the top sectors of the world’s second-largest economy. Also, Zhongrong International Trust has at least 30 products that are now overdue and Zhongrong also halted redemptions on some short-term instruments, according to Bloomberg. Reports said the company doesn’t have an immediate plan to cover the payments since its short-term liquidity has suddenly dried up. Zhongrong is among the biggest firms in China. A Wall Street Journal story today has a headline: “China struggles to halt economic slide.”

In other overnight news, the Euro zone second-quarter GDP came in at up 0.3% from the first quarter and up 0.6%, year-on-year. That was in line with market expectations.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are slightly down and trading around $80.75 a barrel. Worries about demand, amid the dour economic news coming out of China this week, has hit the crude oil market. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 4.2%. 

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, industrial production and capacity utilization, the FOMC minutes and the weekly DOE liquid energy stocks report. 

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,517.75 and then at last week’s high of 4,544.75. Support for active traders is seen at 4,425.00 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 5.0

September Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls still have the near-term technical advantage but are fading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 15,335.00 and then at last week’s high of 15,497.75. On the downside, shorter-term support is seen at this week’s low of 15,020.75 and then at 14,900.00. 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 short covering after hitting a contract low Tuesday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 Tuesday’s high of 120 23/32 and then at this week’s high of 121 9/32. Shorter-term support lies at 120 even and then at the contract low of 119 14/32. Wyckoff’s Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are higher on short covering after hitting a contract low Tuesday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 this week’s high of 110.10.0 and then at 110.20.0. Shorter-term technical support is seen at the overnight low of 109.24.0 and then at the contract low of 109.11.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The September Euro currency futures are a bit higher in early U.S. trading, on short covering. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0978 and then at 1.1035. Shorter-term support is seen at this week’s low of 1.0892 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

September Nymex crude oil prices are slightly lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $892.00 and then at this week’s high of $83.20. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Grain futures prices were higher in overnight trading, on short covering following this week’s selling pressure. The downbeat economic news out of China this week has been bearish for the grains. Weather in the Midwest leans neutral to a little friendlier for corn and soybean prices. Warmer temps and less precip are in the forecast for this week and into next week.  

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

Tuesday, August 15–Jim Wyckoff’s morning markets report

Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed to solidly lower openings when the New York day session begins. Trader and investors attitudes are downbeat Tuesday, following more indictments against former U.S. president Trump and current U.S. president Biden’s son’s scandal. There was also more dismal economic news coming out of China, the world’s second-largest economy.

China economic data released Tuesday showed disappointing results. Slower growth in industrial output and consumer spending was reported. The National Bureau of Statistics said domestic demand remains “insufficient” and the “economy’s recovery foundation still needs to be strengthened”, according to Bloomberg. China’s central bank cut its rate on its one-year loans by 0.15%, to 2.50%, in line with market expectations. That is the second rate cut this year following a 0.10% cut in June. Other data released Tuesday showed industrial production and retail sales slowing. Property investment in China continued its slump. Chinese officials also said they will temporarily stop publishing numbers of youth unemployment to review the methodology after the measure surged to record highs of more than 21%, according to the Financial Times.

Meantime, Russia raised its main interest rate in an emergency meeting to shore up the tattered Russian economy and the depreciating currency, the ruble. Russia raised its main rate to 12% from 8.5%.

The U.S. data point of the day is the retail sales report for July, seen coming in at up 0.4% from June and compares to a 0.2% rise in the June report.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are down and trading around $81.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 4.2%. 

Other U.S. economic data due for release Tuesday includes the Johnson Redbook weekly retail sales report, the Empire State manufacturing survey, import and export prices, the NAHB housing market index, manufacturing and trade inventories and Treasury international capital data.

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are solidly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,517.75 and then at last week’s high of 4,544.75. Support for active traders is seen at last week’s low of 4,459.00 and then at 4,425.00. Wyckoff’s Intra-day Market Rating: 4.0

September Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the near-term technical advantage but are fading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 15,335.00 and then at last week’s high of 15,497.75. On the downside, shorter-term support is seen at Monday’s low of 15,020.75 and then at 14,900.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 120 21/32 and then at Monday’s high of 121 9/32. Shorter-term support lies at the contract low of 119 25/32 and then at 119 even. Wyckoff’s Intra-Day Market Rating: 4.0

September U.S. T-Notes: Prices are solidly lower and hit a contract low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 110.00.0 and then at Monday’s high of 110.10.0. Shorter-term technical support is seen at the overnight contract low of 109.20.5 and then at 109.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5

EURO CURRENCY

The September Euro currency futures are higher in early U.S. trading, on short covering. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.0978 and then at last Friday’s high of 1.1035. Shorter-term support is seen at the Monday’s low of 1.0892 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

September Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $83.20 and then at last week’s high of $84.89. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were lower in overnight trading, pressured by the downbeat economic news out of China. Weather in the Midwest leans neutral to just a little friendlier for corn and soybean prices. Warmer temps and less precip are in the forecast for this week.  

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 14–Jim Wyckoff’s morning markets report

Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins.

There is more dour economic news coming out of China. The Country Garden Holdings property firm is reportedly in financial trouble. The firm is the largest privately held property developer in China. The Chinese offshore yuan has weakened and is near its low for the year against the U.S. dollar, at 7.28. China’s stock market sold off Monday on the Country Garden news.

Meantime, broker SP Angel said in a morning email dispatch that China’s Zhongzhi Enterprise Group Co., one of largest wealth managers in China, missed payments to clients on multiple high-yield investment products. Four major Chinese wealth management firms managed by Zhongzhi Group are reported to have defaulted on their fixed-income products. Chinese banking regulators have set up a task force due to the scale of the default and the large number of affected clients. The move highlights the extent to which officials have been alarmed by the liquidity crunch at Zhongrong and trying to minimize contagion risks, Bloomberg reported.

In other news, Goldman Sachs economists are now forecasting the Federal Reserve will hold steady on its monetary policy until the second quarter of 2024, when at that time they expect the Fed to make an interest rate cut.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are slightly down and trading around $82.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 4.15%. 

There is no major U.S. economic data due for release Monday, but the data pace picks up rapidly Tuesday.

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading a bit. Prices Friday hit a four-week low. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 4,544.75 and then at 4,560.75. Support for active traders is seen at last week’s low of 4,459.00 and then at 4,425.00. Wyckoff’s Intra-day Market Rating: 5.5

September Nasdaq index futures: Prices are slightly higher in early U.S. trading and hit a six-week low overnight. Bulls still have the near-term technical advantage but are fading a bit. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 15.300.00 and then at last week’s high of 15,497.75. On the downside, shorter-term support is seen at 15,000.00 and then at 14,900.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 122 even and then at last week’s high of 123 5/32. Shorter-term support lies at the overnight low of 120 17/32 and then at 120 even. Wyckoff’s Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 110.16.0 and then at 119.29.0. Shorter-term technical support is seen at the overnight low of 109.30.5 and then at the August low of 109.24.0. 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 lower in early U.S. trading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.1035 and then at last week’s high of 1.1085. Shorter-term support is seen at the August low of 1.0935 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

September Nymex crude oil prices are slightly lower in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $84.00 and then at last week’s high of $84.89. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Grain futures prices were mixed in overnight trading. Weather in the Midwest leans a little friendlier for corn and soybean prices. Warmer temps and less precip are in the forecast for this week. On tap today is the weekly USDA export inspections and weekly crop progress reports.

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