Friday, August 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in quieter trading overnight. The U.S. stock indexes are pointed to firmer openings when the New York day session begins. The terrorist bombings in Kabul, Afghanistan Thursday that killed over a dozen American soldiers and many more Afghans did not have a major impact on markets, but has tempered risk appetite in the marketplace late this week.
The annual Federal Reserve symposium being held in Jackson Hole, Wyoming late this week saw three Fed officials on Thursday say they favor tapering the central bank’s very accommodative monetary policy sooner rather than later—despite the growing concerns about the resurgence of the coronavirus and its potential impact on the U.S. and global economies. Fed Chair Jerome Powell is slated to speak virtually on Friday morning at 10:00 a.m. EDT. Many traders and investors had believed the Federal Reserve would extend its easy-money policies for a longer period of time than they had planned just a few weeks ago, due to the spreading Covid delta variant. Powell may still feel that way and may provide more clarity to his intentions this morning. Some market watchers believe Powell in his speech won’t tip his hand on timing of any Fed policy moves.
The key outside markets today see the U.S. dollar index slightly lower but still trending higher. Nymex crude oil futures prices are higher and trading around $68.40 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.341%. U.S. bond yields are in the rise this week, hinting that bond traders are concerned about U.S. monetary policy tightening coming from the Fed sooner rather than later.
U.S. economic data due for release Friday includes personal income and outlays, advance economic indicators, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,488.00 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,450.00 and then at this week’s low of 4,426.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the solid chart 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 bullish early today. Shorter-term technical resistance is seen at the contract high of 15,383.25 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,200.00 and then at this week’s low of 15,076.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. 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 163 even and then at Wednesday’s high of 163 19/32. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at this week’s low of 161 25/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Thursday’s high of 133.04.0 and then at 133.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 132.25.5 and then at the August low of 132.21.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears still 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 above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1803 and then at 1.1831. Buy stops likely reside just above those levels. Shorter-term support is seen at Wednesday’s low of 1.1751 and then at this week’s low of 1.1720. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a two-week high in early U.S. trading. Bulls have momentum to suggest still more upside. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-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 the overnight high of $68.76 and then at $69.00. Look for sell stops just below technical support at the overnight low of $67.52 and then at $67.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures were weaker overnight. Late-season rains across much of the U.S. Midwest have likely improved the corn and soybean crops, and that’s bearish. The grain markets may pause just ahead of harvest and ahead of the Sept. 10 USDA monthly supply and demand report, when new crop production estimates will be released by the agency.
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