Wednesday, August 30–Jim Wyckoff’s morning markets report
Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed to steady to slightly lower openings when the New York day session begins. Sentiment overseas has improved this week as China continues to implement measures to stimulate its listing economy. Reports say China’s largest banks are preparing to cut interest rates on existing mortgages to support consumer spending and the property sector.
In overnight news, the Euro zone economic sentiment index dropped to 93.3 in August from 94.5 in July, but was in line with market expectations.
A busy U.S. data week is highlighted by Friday’s employment situation report for August from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000, compared to a rise of 187,000 in the July report.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil futures prices are firmer and trading around $81.75 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.147%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the second estimate of second-quarter GDP, including the closely watched PCE price indexes, the advance economic indicators report, pending home sales and the weekly DOE liquid energy stocks report.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading after hitting a three-week high overnight. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,566.00 and then at 4,600.00. Support for active traders is seen at 4,500.00 and then at this week’s low of 4,464.00. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly lower in early U.S. trading after hitting a three-week high overnight. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 15,659.75 and then at 15,800.00. On the downside, shorter-term support is seen at 15,400.00 and then at this week’s low of 15,164.25. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker 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 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 this week’s high of 121 17/32 and then at 122 even. Shorter-term support lies at this week’s low of 119 24/32 and then at 119 even. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker 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 resistance lies at this week’s high of 110.29.5 and then at 111.00.0. Shorter-term technical support is seen at 110.00.0 and then at this week’s low of 109.25.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are slightly up 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0951 and then at 1.1000. Shorter-term support is seen at 1.0900 and then at this week’s low of 1.0843. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer and hit a two-week high in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $83.00 and then at the August high of $84.16. Look for sell stops just below technical support at $80.00 and then at this week’s low of $79.34. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were firmer in overnight trading. Not much new at mid-week. Weather in the Midwest leans slightly bullish for corn and soybean prices. Much of the corn and soybean crops need rain to finish out their growing seasons. However, little to no rain and hotter temps are in the forecasts.
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