Friday, August 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight, with European shares leading the way with solid losses. The currency markets are in keen focus late this week as the Russian ruble has sunk against the U.S. dollar and the Euro currency fell to a one-year low against the greenback. The Euro currency has taken a beating on the world foreign exchange market today, as the Euro zone has a heavier exposure to the Turkish lira, which has been pummeled recently on the foreign exchange market—losing around 15% of its value just this week. All of the above have pushed the U.S. dollar index to a 13-month high today, on safe-haven demand. The world marketplace is especially concerned about the Turkish lira’s situation expanding into a contagion of secondary world currencies. The Financial Times has reported the European Central Bank is examining several European banks’ exposure to the lira. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
The gold and silver market bulls are frustrated the that currency market turmoil has not at all benefitted the safe-haven metals—at least not yet.
The key U.S. data point of the week is Friday morning’s consumer price index report for July, which is forecast to come in at up 0.2% from June. Thursday’s producer price index for July came in lower than expected, at unchanged from June when a 0.2% rise was expected.
Other U.S. economic data due for release Friday includes the monthly Treasury statement of receipts and outlays.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading, on profit taking after hitting a six-month high earlier this week. The bulls still have the solid overall near-term technical advantage. The 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 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 2,852.75 and then at this week’s high of 2,863.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,836.75 and then at 2,820.00. 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 profit taking. Bulls still have the firm 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 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 7,472.75 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,424.25 and then at 7,400.00. 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 higher in early U.S. trading, on safe-haven demand. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 144 5/32 and then at 144 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 12/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading, on safe-haven demand. 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 bullish early today. Shorter-term resistance lies at the overnight high of 120.04.5 and then at 120.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.23.5 and then at 119.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is solidly 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.035 and then at 96.250. Shorter-term support is seen at 95.500 and then at the overnight low of 94.385. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
September Nymex crude oil 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 have faded this week. 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 $67.50 and then at $68.00. Look for sell stops just below technical support at the overnight low of $66.14 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were mixed overnight. The big report of the week for the grains is Friday morning’s monthly supply-and-demand report. Look for the most active trading of the week after that report’s release. Weather in the Corn Belt remains a non-threatening element.
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