Thursday, August 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed to narrowly mixed openings and not far below this week’s record highs in the S&P 500 and Nasdaq. There is scant risk aversion in the marketplace this week.
Traders and investors are awaiting the annual Federal Reserve symposium being held in Jackson Hole, Wyoming late this week. Fed Chair Jerome Powell is slated to speak virtually on Friday. Many traders and investors believe the Federal Reserve will extend its easy-money policies for a longer period of time than they had planned just a few weeks ago, due to the spreading Covid delta variant.
The key outside markets today see the U.S. dollar index firmer and still trending higher. Nymex crude oil futures prices are weaker and trading around $67.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.346%. U.S. bond yields are in the rise this week, hinting that bond traders are at least a bit worried about a hawkish U.S. monetary policy tone coming from the Fed at this week’s Jackson Hole confab.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of second-quarter gross domestic product, including the PCE price index that the Fed watches closely for inflation. The PCE index was up 6.4% from the first quarter in the first GDP estimate of the second quarter. Also due out today is the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract high of 4,488.00 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,450.00 and then at this week’s low of 4,426.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bulls have the solid chart advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the contract high of 15,383.25 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,200.00 and then at this week’s low of 15,076.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 163 even and then at Wednesday’s high of 163 19/32. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at 161 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 133.04.0 and then at 133.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.28.0 and then at the August low of 132.21.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at 1.1831 and then at 1.1865. Buy stops likely reside just above those levels. Shorter-term support is seen at Wednesday’s low of 1.1751 and then at this week’s low of 1.1720. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading on a corrective pullback from this week’s strong gains. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below 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 this week’s high of $68.54 and then at $69.00. Look for sell stops just below technical support at Wednesday’s low of $66.92 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were mixed overnight. Bulls have regained some footing this week. On tap today is the weekly USDA export sales report.
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