Wednesday, August 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight, on fresh jitters as the U.S. prepares to slap more trade sanctions on China—now totaling $50 billion. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
In overnight news, China’s imports rose 23.7% in July, year-on-year. Imports were up 14.1% in June. China’s exports rose 12.2% in July, following an 11.3% increase in June. The July surge in imports was attributed to China stocking up on some goods to prepare for a protracted trade war with the U.S.
The key “outside markets” today find Nymex crude oil prices slightly higher and trading just above $69.00 a barrel. The U.S. dollar index is slightly weaker today but still not far below its recent 12-month high.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher and near the six-month high hit on Tuesday, in early U.S. trading. The 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. 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 2,875.00 and then at the January contract high of 2,889.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 2,848.25 and then at this week’s low of 2,835.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are near steady in early trading. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 7,500.00 and then at the July high of 7,530.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 7,440.25 and then at this week’s low of 7,387.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below 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 this week’s high of 143 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 142 15/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up in early U.S. trading. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Tuesday’s high of 119.24.0 and then at this week’s high of 119.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.13.0 and then at 119.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading, on mild profit taking. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 95.350 and then at the July high of 95.440. Shorter-term support is seen at the overnight low of 94.820 and then at 94.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $70.00 and then at $70.43. Look for sell stops just below technical support at $69.00 and then at this week’s low of $68.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were firmer overnight. Grains are supported on bullish world supply-and-demand fundamentals. The next big report for the grains is Friday’s monthly supply-and-demand report. Weather in the Corn Belt is still mostly benign. No serious weather markets have occurred this summer and the clock is ticking for such to occur.
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