Tuesday, August 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed toward modestly weaker openings when the New York day session begins.
In overnight news, the central bank of Australia kept its monetary policy unchanged, but the bank said monetary stimulus and low interest rates will be required for some time to come.
Gold prices remain near this week’s record highs and are approaching $2,000 an ounce, on ongoing safe-haven demand amid the worrisome rise in Covid-19 infections, geopolitics and concerns about problematic price inflation in the coming months.
The key U.S. data point of the week will be Friday’s jobs report for July from the Labor Department. The non-farm payrolls number is forecast to be up by around 1.25 million after rising by 4.8 million in June. However, don’t be surprised to see a miss from the forecasts, to likely move the markets.
The important outside markets today see Nymex crude oil prices weaker and trading around $40.25 a barrel. The crude oil market bulls have seen their price uptrend on the daily chart stall out and turn into sideways and choppy trading. The U.S. dollar index is weaker today. The yield on the benchmark 10-year U.S. Treasury note is presently around 5.4%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, the IBD/TIPP economic optimism index, and manufacturers’ shipments and inventories.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading and did hit a 5.5-month high overnight. Bulls still have the solid overall near-term technical advantage amid a 4.5-month-old price uptrend in place. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,297.75 and then at 3,325.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 3,250.00 and then at 3,225.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading after hitting a record high overnight. Bulls remain in solid overall technical control. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 11,0092.00 and then at 11,200.00. On the downside, shorter-term support is seen at Monday’s low of 10,876.25 and then at 10,750. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the solid near-term chart advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last week’s high of 182 25/32 and then at 183 even. Shorter-term support lies at Monday’s low of 181 9/32 and then at 181 even. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are higher in early U.S. trading and near the recent contract high. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at last week’s contract high of 140.06.0 and then at 140.12.0. Shorter-term technical support lies at Monday’s low of 139.28.0 and then at 139.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
The September Euro currency futures are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1816 and then at 1.1850. Shorter-term support is seen at the overnight low of 1.1762 and then at Monday’s low of 1.1706. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are lower in early U.S. trading. A gentle price uptrend on the daily chart has rolled over into sideways and choppy trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $41.24 and then at $42.00. Look for sell stops just below technical support at Monday’s low of $39.58 and then at last week’s low of $38.72. Wyckoff’s Intra-Day Market Rating: 4.0
US grain futures are weaker in early U.S. pre-market trading. Non-threatening U.S. weather and good-looking corn and soybean crops in the U.S. Midwest are bearish. August is now under way and harvest creeps closer for corn and soybeans. Unless weather patterns significantly change the majority of the U.S. corn and soybean crops will cruise into harvest with bountiful yield potential.
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.