Monday, August 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
It’s a risk-off day in the world marketplace to start the trading week Monday, as global stock markets were lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
The stock and currency markets are roiled again today, with focus on a crumbling Turkish lira and that country’s financial troubles. The Lira was down as much as 10% today following sharp losses last week. Turkey’s government has so far done or said little to stem the drop in the lira.
The Indian rupee, South African rand and Mexican peso are included in those secondary currencies also getting hit hard today by an appreciating U.S. dollar. The U.S. dollar index rose to another 13-month high today, on safe-haven demand.
The marketplace is worried about the Turkish lira’s severe depreciation expanding into a contagion of secondary world currencies.
The gold and silver market bulls are getting no benefit from safe-haven demand amid the keener uncertainty in the world marketplace. The yellow metal is down and hit a nearly 1.5-year low today.
In other news, China announced late Friday that it will not adopt a policy of devaluing its currency, the yuan, to counter the negative effects of a trade war with the U.S.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading, on more profit taking after hitting a six-month high last week. The bulls still have the overall near-term technical advantage but are fading now, after a technically bearish weekly low close on Friday. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,835.75 and then at Friday’s high of 2,852.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,820.50 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index December futures: Prices are lower in early trading, on more profit taking. Bulls still have the overall near-term technical advantage, but are fading after Friday’s technically bearish weekly low close. Shorter-term moving averages (4- 9-and 18-day) are still bullish early today. The 4-day moving average is above the 9-day and 18-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 the overnight high of 7,427.50 and then at 7,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,378.25 and then at 7,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading, on a corrective pullback from recent gains. Prices did hit a three-week high overnight. 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 144 25/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at 144 even and then at 143 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading, on a mild corrective pullback after hitting a six-week high overnight. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 120.14.5 and then at the July high of 120.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.08.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit a 13-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.390 and then at 96.500. Shorter-term support is seen at 96.000 and then at 95.440. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. Prices Friday hit a six-week low and the bulls are fading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $68.00 and then at $68.50. Look for sell stops just below technical support at $67.00 and then at last week’s low of $66.14. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were lower overnight, on follow-through selling from Friday’s big down day, in the wake of a bearish monthly supply-and-demand report issued Friday morning. Grain market bulls are in serious trouble again.
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
It works really well for me