Thursday, August 17–Jim Wyckoff’s morning markets report
In overnight news, China’s central bank said it will provide further stimulus to the listing Chinese economy. The central bank said it wants to prevent the Chinese yuan from further depreciation. The central bank also said it will coordinate financial support for local government debt risk and provide support to the housing market. The statements came from the People’s Bank of China second-quarter monetary policy report.
Meantime, the minutes from the last FOMC meeting of the Federal Reserve, released Wednesday afternoon, reminded traders and investors that the Fed remains committed to bringing down U.S. inflation. The marketplace read the minutes as leaning hawkish. U.S. Treasury yields rose following the release of the minutes, while the U.S. dollar index hit a nine-week high overnight. Gold prices dropped to a five-month low overnight.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and leading economic indicators.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading after hitting a six-week low overnight. 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 early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 4,467.25 and then at this week’s high of 4,517.75. Support for active traders is seen at 4,400.00 and then at 4,368.50. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly up in early U.S. trading after hitting a six-week low overnight. 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 Wednesday’s high of 15,166.00 and then at this week’s high of 15,335.00. On the downside, shorter-term support is seen at 14,800.00 and then at 14,700.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are 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 technical resistance is seen at the overnight high of 119 19/32 and then at Wednesday’s high of 120 19/32. Shorter-term support lies at 118 even and then at 117 even. Wyckoff’s Intra-Day Market Rating: 3.5
September U.S. T-Notes: Prices are 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 the overnight high of 109.20.5 and then at 110.00.0. Shorter-term technical support is seen at the overnight contract low of 109.05.5 and then at 109.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are a just bit higher in early U.S. trading after hitting a five-week low overnight. 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 this week’s high of 1.0978 and then at 1.1035. Shorter-term support is seen at the overnight low of 1.0877 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below 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 $82.00 and then at this week’s high of $83.20. Look for sell stops just below technical support at the overnight low of $78.95 and then at $77.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed but mostly weaker in overnight trading. On tap today is the weekly USDA export sales report. The downbeat economic news out of China this week has been bearish for the grains. Weather in the Midwest leans friendlier for corn and especially soybean prices. Hot temps and slack precip are in the forecast for the Midwest 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