Thursday, August 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. data point of the day is the second estimate of second-quarter gross domestic product growth estimate, which is expected to be down 0.5% versus down 0.9% in the first quarter.
In overnight news, China’s central bank announced a one trillion yuan stimulus plan amid the severe headwinds facing the world’s second-largest economy and the consequences of China’s zero-Covid policy.
European market watchers will closely scrutinize today’s release of the minutes of the last meeting of the European Central Bank.
The marketplace is awaiting the Jackson Hole, Wyoming Federal Reserve annual symposium, which begins Thursday and including a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed meetings have significantly moved markets. Markets are expecting Powell to lean hawkish on U.S. monetary policy and on the Fed’s fight against inflation.
The key outside markets today see Nymex crude oil prices higher and trading around $95.00 a barrel. The U.S. dollar index is lower in early U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.086%. Bond yields have been on the rise recently.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the second-quarter GDP estimate and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,187.75 and then at this week’s high of 4,221.50. Support for active traders is seen at this week’s low of 4,110.75 and then at 4,080.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 13,085.50 and then at this week’s high of 13,226.50. On the downside, shorter-term support is seen at this week’s low of 12,823.50 and then at 12,700.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly up in early U.S. trading. Prices are in a downtrend on the daily bar chart and bears have the advantage. 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 to bearish early today. Shorter-term technical resistance is seen at 137 9/32 and then at 138 even. Shorter-term support lies at this week’s low of 135 19/32 and then at 135 even. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are slightly firmer in early U.S. trading. Prices are trending down on the daily bar chart and bears have the technical advantage. 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 118.00.0 and then at 118.10.0. Shorter-term technical support lies at this week’s low of 117.06.0 and then at 117.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-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 1.0131 and then at 1.0200. Shorter-term support is seen at the contract low of .9988 and then at .9900. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker and hit a three-week high overnight. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $95.76 and then at $97.00. Look for sell stops just below technical support at $93.00 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were mixed overnight. Corn and soybean bulls have gained the near-term technical advantage with this week’s strong gains. Wheat remains in a follower’s mode and has made moderate gains this week. Wheat bears still have the solid near-term technical advantage. The focus of grain traders this week is on the Pro Farmer annual corn and soybean crop tour that ends late Thursday, with the tour’s crop production estimates coming out Friday afternoon. Initial results of the tour were lower-than-expected yields. On tap today is the weekly USDA export sales report.
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