Monday, August 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There is keener risk aversion in the marketplace to start the trading week after China’s central bank unexpectedly announced it is lowering interest rates and adding liquidity to China’s financial system after some dour economic data reported for the world’s second-largest economy. Chinese data on factory output, investment, consumer spending and real estate all weakened in July. The dour China news added to fears of a global economic recession. Covid restrictions and a troubled property market have helped to hobble China’s economy in recent months. Raw commodity prices on Monday took a hit on the China news, led by a big drop in crude oil prices.
The key outside markets today see Nymex crude oil prices sharply lower and trading around $88.00 a barrel. The U.S. dollar index is solidly higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.831%.
U.S. economic data due for release Monday includes the Empire State manufacturing survey, the NAHB housing market index and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading on a mild, routine corrective pullback after hitting a three-month high Friday. Bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above 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 last week’s high of 4,282.75 and then at 4,300.00. Support for active traders is seen at 4,200.00 and then at 4,150.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly down in early U.S. trading, on a corrective pullback after hitting a three-month high Friday. Prices are trending higher on the daily bar chart and bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at last week’s high of 13,583.25 and then at 13,750.00. On the downside, shorter-term support is seen at 13,250.00 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering. 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 technical resistance is seen at 142 even and then at 143 even. Shorter-term support lies at the overnight low of 140 13/32 and then at 140 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the slight overall near-term 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 to bearish early today. Shorter-term resistance lies at 119.20.0 and then at 120.00.0. Shorter-term technical support lies at last week’s low of 118.30.5 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0292 and then at 1.0353. Shorter-term support is seen at 1.0200 and then at 1.0154. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower in early U.S. trading and near the recent 4.5-month low. Bears have the overall near-term technical advantage. 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 bearish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at the overnight high of $92.10. Look for sell stops just below technical support at the August low of $87.01 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
U.S. grain futures were solidly lower overnight. Weaker economic data coming out of China and non-threatening Corn Belt weather forecasts are hitting the grains hard to start the trading week. On tap today is the weekly USDA export inspections 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