Thursday, August 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed in overnight trading Thursday. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Still, equities bulls are having the better week. There has been a perceived de-escalation in the U.S. and North Korea stand-off regarding its nuclear missiles, which has boosted trader and investor risk appetites. However, this matter will likely be on the front burner of the marketplace soon.
Gold prices are moderately higher in the aftermath of Wednesday afternoon’s FOMC minutes that showed FOMC members split of the prospects of further Federal Reserve interest rate increases in the coming months. Very low inflation readings from major economies around the world, including the U.S., are preventing the Fed from raising interest rates as soon as it would like.
In overnight news, the Euro zone consumer price index for July came in at down 0.5% from June and was up 1.3%, year-on-year. This is yet another very low inflation reading that falls into the camp of the European Central Bank monetary policy doves.
European traders were awaiting the release of the minutes of the latest European Central Bank meeting, due out shortly.
For the key “outside markets” early Thursday, the U.S. dollar index is higher as the greenback bulls are having a good week. A bullish weekly high close in the USDX on Friday would begin to suggest a market bottom is in place. Meantime, Nymex crude oil futures are slightly lower and hit another three-week low overnight. Rising U.S. shale production is weighing on the oil market late this week. A bearish weekly low close in Nymex crude oil futures on Friday would hint that the uptrend on the daily bar chart has ended.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, industrial production and capacity utilization and leading economic indicators.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are not far below the recent contract and record high. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 2,474.00 and then at the contract high of 2,488.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,460.00 and then at 2,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index September futures: Prices are weaker in early U.S. trading today. 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 early today. Shorter-term technical resistance is seen at this week’s high of 5,949.50 and then at last week’s high of 5,972.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,895.00 and then at 5,875.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has turned choppy this week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 the overnight high of 154 4/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at 154 even and then at this week’s low of 153 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are lower amid less risk aversion this week. Bulls still 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 even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 126.17.5 and then at 126.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.08.0 and then at this week’s low of 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is solidly higher in early U.S. trading. Bears still have the 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. The 9-day is above 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 this week’s high of 94.055 and then at 94.250. Shorter-term support is seen at 93.500 and then at the overnight low of 93.210. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower and hit a three-week low in early U.S. trading. Bulls are fading this week. Look for buy stops to reside just above technical resistance at $47.00 and then at $48.00. Look for sell stops just below technical support at $46.00 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were narrowly mixed overnight. Traders will closely examine today’s weekly USDA export sales report. Grain market bears remain in firm overall near-term technical control. Traders are looking ahead to the U.S. harvest of corn and soybeans, which is just a few weeks away.