Tuesday, August 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly firmer overnight. The U.S. stock indexes are pointed mixed to weaker openings when the New York day session begins. Markets are quieter Tuesday morning, amid the summertime doldrums, when much of Europe is on holiday and many North American traders and investors are taking family vacations. Traders will be closely parsing speeches by a couple of Federal Reserve officials today, Loretta Mester and Charles Evans, looking for clues on the timing and direction of U.S. monetary policy—especially after last Friday’s much-stronger-than-expected U.S. jobs report. Separately, reports this week say the Biden Administration generally supports appointing Fed Chairman Jerome Powell to a second term.
Germany’s close watched ZEW consumer sentiment survey showed a drop for the third straight month, and to the lowest level since last November, as a rise in Covid infection rates raises concerns over a possible tightening of pandemic curbs. The ZEW economic expectations index fell to 40.4 in August from 63.3 in July, with the institute’s president warning of “increasing risks” to the German economy. The index of current conditions improved to 29.3 in August from 21.9 in July.
The key outside markets today see the U.S. dollar index firmer and hitting a three-week high overnight. Nymex crude oil futures prices are higher on a corrective bounce from recent strong selling pressure and trading around $67.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.316%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales reports, the NFIB small business index, and preliminary productivity and costs.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls 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 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 the contract high of 4,433.25 and then at 4,450.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,400.00 and then at last week’s low of 4,365.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are a bit firmer in early U.S. trading. Bulls have the solid chart advantage. Prices last week hit a contract and record high. 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 the contract high of 15,172.50 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 15,003.25 and then at 14,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady in early U.S. trading after hitting a two-week low overnight. A three-month-old price uptrend on the daily chart is in jeopardy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 164 18/32 and then at 165 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 163 10/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are near steady in early U.S. trading and hit a nearly three-week low overnight. A three-month-old price uptrend on the daily bar chart is in jeopardy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 134.00.0 and then at 134.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.19.0 and then at 133.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are lower and hit a nine-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1777 and then at 1.1800. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1723 and then at 1.1700. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading on short covering. Bulls are still in serious technical trouble. 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 bullish early today. Look for buy stops to reside just above technical resistance at $69.00 and then at $70.00. Look for sell stops just below technical support at overnight low of $66.56 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed but mostly firmer overnight. Trading has turned choppy. The wheat market bulls are in firm technical control, corn bulls have the slight chart advantage and the soybean bulls and bears are on a level overall near-term technical playing field. Traders are awaiting Thursday’s USDA monthly supply and demand report, arguably the most important grain market report of the month.
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