Wednesday, August 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian indexes mostly up and European indexes mostly down. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on routine corrective pullbacks after hitting four-month highs on Tuesday. Corporate earnings reports are in focus this week. Traders and investors will closely examine this afternoon’s minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC).
In overnight news, the U.K. got a hot inflation reading, as its July consumer price index was up 10.1%, year-on-year, following a rise of 9.4% in June.
The key outside markets today see Nymex crude oil prices higher and trading around $87.50 a barrel. The U.S. dollar index is slightly higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.86%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, manufacturing and trade inventories and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading, on routine corrective pullback after hitting a four-month high Monday. 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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,327.50 and then at 4,350.00. Support for active traders is seen at this week’s low of 4,249.00 and then at 4,200.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are down in early U.S. trading, on a corrective pullback after hitting a four-month high Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 13,740.75 and then at 13,850.00. On the downside, shorter-term support is seen at 13,400.00 and then at 13,200.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. 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 technical resistance is seen at the overnight high of 141 15/32 and then at this week’s high of 142 3/32. Shorter-term support lies at the August low of 139 16/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower and hit a three-week low in early U.S. trading. 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 the overnight high of 119.14.5 and then at this week’s high of 119.31.0. Shorter-term technical support lies at 118.24.0 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are slightly up low in early U.S. trading. Bears have the firm 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.0250 and then at this week’s high of 1.0292. Shorter-term support is seen at this week’s low of 1.0114 and then at 1.0050. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. Prices Tuesday hit a five-month low. Bears have the firm 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at this week’s low of $85.73 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were mixed to slightly up overnight. Bears are having a good week in the grains.
Weak economic data coming out of China this week, a generally stronger U.S. dollar, lower crude oil prices and non-threatening Corn Belt weather forecasts are all hitting the grains this week. The big speculative “fund” traders are now likely licking their chops and looking to be sellers in the grains.
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