Monday, August 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were higher in overnight trading. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Trader and investor attitudes are much more upbeat to start the trading week. There were no major geopolitical developments over the weekend, and it appears the civil unrest in Hong Kong did not escalate, as many had feared.
Upbeat comments about the U.S. economy from President Trump and his economic officials, namely saying there is no recession on the horizon, is also boosting investor confidence.
News over the weekend that China plans to further stimulate its economy with interest rate reforms has combined with news late last week that the European Central Bank plans further monetary policy stimulus in September has brightened the world marketplace.
Safe-haven assets gold and U.S. Treasuries are under selling pressure to start the week. The U.S. Treasury market yield curve is no longer inverted after briefly becoming so last week.
In other overnight news, the Euro zone July consumer price index was reported down 0.5% from June and up 1.0%, year-on-year. It was yet another report coming from a major world economy that shows very low inflation, to the point of likely being problematic.
The key “outside markets” today see Nymex crude oil prices higher and trading around $55.50 a barrel. The U.S. dollar index is modestly higher.
Later this week the annual Jackson Hole, Wyoming Federal Reserve confab that sees central banks of the world attending will be closely monitored by the marketplace.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field amid choppy trading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,925.00 and then at last week’s high of 2,944.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the 2,900.00 and then at overnight low of 2,892.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,702.00 and then at 7,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,652.00 and then at the overnight low of 7,616.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are solidly lower on normal profit taking after hitting a contract last week. Bulls still have the firm overall 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 bearish early today. Shorter-term technical resistance is seen at 164 even and then at the overnight high of 165 2/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 163 12/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower on more profit taking after hitting a contract high last week. Bulls still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term support lies at the overnight low of 130.09.5 and then at 130.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 130.26.0 and then at 131.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is modestly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 98.205 and then at 98.445. Shorter-term support is seen at 97.680 and then at 97.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are higher in early U.S. trading. Bears still have the overall near-term technical advantage amid a four-week-old price downtrend in place on the daily bar chart. The shorter-term moving averages are neutral early today as the 4-day is even with 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 the overnight high of $55.78 and then at $56.00. Look for sell stops just below technical support at the overnight low of $54.84 and then at $54.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were lower in overnight trading. Corn was down around 6 cents, soybeans down around 6 cents and wheat down about 3 cents. It’s been a remarkable spring and summer in the grain markets. What started out as a very wet spring that produced record-late U.S. corn and soybean planting has turned into a late summer with pretty good growing conditions, including no intense heat and timely rains that have allowed the late-planted crops to make good growing progress. That’s allowed the grain futures markets to drift lower the past several weeks.
Corn Belt weather forecasts are still calling conditions that are not threatening to the corn and soybean crops.
The key focus of the US grain markets this week will be the annual Pro Farmer Midwest crop tour that kicks off Tuesday and ends late Thursday. With such variable field conditions across the Midwest, this year’s tour findings will be scrutinized extra closely.
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