Monday, August 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Traders and investors are concerned and a bit risk averse amid what is perceived to be a still-aggressive Federal Reserve that is hell-bent on lowering inflation even if it causes a U.S. economic recession. The marketplace is eagerly awaiting the late-week Jackson Hole, Wyoming Federal Reserve annual symposium, including a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed confabs have produced significant monetary policy statements from the U.S. central bank.
In overnight news, China cut its one- and five-year prime loan rates Monday, a move that was expected following the rate cuts last week.
The key outside markets today see Nymex crude oil prices slightly up and trading around $90.00 a barrel. The U.S. dollar index is firmer and hit a five-week high in early U.S. trading. The USDX is back the 20-year high scored in July. The yield on the 10-year U.S. Treasury note is fetching 2.981%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,221.50 and then at Friday’s high of 4,288.00. Support for active traders is seen at 4,150.00 and then at 4,130.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,226.50 and then at 13,400.00. On the downside, shorter-term support is seen at 13,000.00 and then at 12,963.25. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices are in a downtrend on the daily bar chart. 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 technical resistance is seen at the overnight high of 139 4/32 and then at 140 even. Shorter-term support lies at the August low of 138 7/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly up but hit a four-week low in early U.S. trading. Prices are trending down on the daily bar chart. 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 bearish early today. Shorter-term resistance lies at Friday’s high of 118.29.5 and then at 119.00.0. Shorter-term technical support lies at the overnight low of 117.31.5 and then at 117.20.0. 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 five-week low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.0114 and then at 1.0150. Shorter-term support is seen at the July low of 1.0000 and then at .9950. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are up a bit in early U.S. trading. Bears have the overall near-term technical advantage as prices are trending down. 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 bullish early today. Look for buy stops to reside just above technical resistance at last week’s high of $91.69 and then at $93.00. Look for sell stops just below technical support at the overnight low of $88.35 and then at $87.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were narrowly mixed overnight. Bears are in near-term technical control of corn and wheat, and soybeans are neutral. A stronger U.S. dollar, down-trending crude oil prices and non-threatening Corn Belt weather are all bearish for the grains. On tap today is the weekly USDA export inspections report. The focus of grain traders this week is on the Pro Farmer annual corn and soybean crop tour.
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