Monday, August 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to slightly up overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session beings. Corporate earnings reports will be in focus for stock traders this week. We are in the “dog days” of summer, whereby trading volumes in many markets wane as traders and investors step away from markets and take family vacations. Much of Europe is on vacation during August. Markets are likely to be mostly quieter until after the U.S. Labor Day holiday in early September.
Traders are still digesting last Friday morning’s U.S. jobs report for July, which showed a strong rise of 528,000 in non-farm payrolls. A gain of around 260,000 was expected. After Friday’s strong jobs numbers, notions of the Federal Reserve easing up on its aggressive monetary policy tightening were somewhat dashed. Most in the marketplace still look for another 0.75% rate hike from the Fed in September.
Traders are still watching China’s military exercises near Taiwan. A Wall Street Journal headline reads, “China’s military exercises showcase modern fighting force preparing for possible war in the Taiwan Strait.”
The key outside markets today see Nymex crude oil prices lower and trading around $87.75 a barrel. Crude oil on Friday hit a 4.5-month low. The U.S. dollar index is slightly lower in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 2.818%. The 2-year U.S. T-note yield is 3.209, which has the yield curve still inverted and is one clue the U.S. is in or headed toward economic recession.
U.S. economic data due for release Monday is light and includes the employment trends index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading and near last week’s nearly two-month high. 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 bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 4,173.25 and then at 4,200.00. Support for active traders is seen at the overnight low of 4,130.75 and then at 4,100.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer in early U.S. trading and nor far below last week’s three-month high. 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 bullish early today. Shorter-term technical resistance is seen at 13,500.00 and then at 13,700.00. On the downside, shorter-term support is seen at the overnight low of 13,167.75 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. A six-week-old price uptrend on the daily bar chart has stalled out. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 143 even and then at Friday’s high of 143 27/32. Shorter-term support lies at last week’s low of 140 19/32 even and then at 140 even. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage but a six-week-old uptrend on the daily bar chart has stalled out. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 120.00.0 and then at 120.16.0. Shorter-term technical support lies at last week’s low of 119.07.5 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are a bit higher in early U.S. trading. Bears have the firm overall near-term technical advantage. However, trading has been sideways and choppy for three weeks. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.0300 and then at last week’s high of 1.0327. Shorter-term support is seen at last week’s low of 1.0154 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Prices Friday hit a 4.5-month low. Bears have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $90.17 and then at $92.00. Look for sell stops just below technical support at last week’s low of $87.01 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower overnight. Another weather market in the grains has fizzled and the window is rapidly closing for a new weather market scare to play out this summer. Grain shipments continue to flow out of the Ukraine and fears of a global economic recession are prompting concerns of less demand for grain. 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