Monday, August 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. U.S. stock indexes are pointing toward narrowly mixed openings when the New York day session begins.
Gold prices are up slightly after pushing to a multi-month high on Friday. Gold bulls remain in firm near-term technical control amid a steep price uptrend in place on the daily bar chart.
The highlight of the trading week will be the annual central bankers meeting held in Jackson Hole, Wyoming, Thursday through Saturday. Highlights of central bank speakers from around the world include Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. The marketplace will closely examine the Jackson Hole speeches for clues on future monetary policy moves by the world’s major central banks. In recent years the Jackson Hole central bankers confab has significantly moved the markets.
The U.S.-North Korea stand-off regarding North Korea’s nuclear missile program is still near the front burner of the marketplace. The U.S. and South Korea will hold joint military exercises this week, which could prompt an angry reaction from North Korea. This matter has prompted safe-haven moves into gold and U.S. Treasuries, and will likely continue to do so for the near term.
The Trump administration remains in turmoil, and that’s also causing some nervousness in the markets, and is a bearish element for the U.S. stock market and bullish for safe-haven assets. The U.S. stock market has become wobbly during the dog days of August, partly on worries about Trump’s ability to achieve his objectives amid such controversy. Trump economic advisors resigned last week and advisor Steve Bannon has been fired.
The world stock market weakness seen just recently could also be in anticipation of the historically stock-market- turbulent months of September and October being just around the corner. It’s likely that stock market action and volatility will pick up after the U.S. Labor Day holiday in early September. That’s when most U.S. traders’ family vacations are over, their kids are back in school, and European traders will be back from their August vacations.
The key “outside markets” early Monday see the U.S. dollar index slightly higher. The greenback has been trending higher during the month of August. Meantime, Nymex crude oil futures are slightly higher after posting good gains on Friday. There is an OPEC technical meeting in Vienna, Austria today, to discuss compliance on crude oil production quotas among cartel members.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are near steady in early U.S. trading. Bulls are fading and prices Friday hit a six-week low and closed at a bearish weekly low close. That’s an early clue that a near-term market top is in place. Recent higher volatility at higher price levels is also a bearish clue that a market top is in place. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at Friday’s high of 2,439.50 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,419.59 and then at 2,410.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index September futures: Prices are slightly lower in early U.S. trading today. Bulls have faded recently. The recent higher volatility at higher price levels is a bearish warning signal that a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 5,816.75 and then at Friday’s high of 5,835.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 5,772.50 and then at the August low of 5,761.00. 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 slightly higher in early U.S. trading. Prices Friday hit a seven-week high. Bulls have the firm overall near-term technical advantage amid a price uptrend in place on the daily bar chart. 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 technical resistance is seen at Friday’s high of 156 12/32 and then at 156 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 17/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are slightly higher in early U.S. trading. Prices Friday hit an 11-week high. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily bar chart. 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 early today. Shorter-term resistance lies at the overnight high of 126.27.5 and then at Friday’s high of 127.01.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.19.0 and then at 126.16.0. 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 near steady in early U.S. trading. Bears still have the overall near-term technical advantage. However, prices have been trending higher during August. 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 bearish early today. The dollar index finds shorter-term technical resistance at Friday’s high of 93.685 and then at last week’s high of 94.055. Shorter-term support is seen at 93.210 and then at last week’s low of 92.945. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly higher. Bulls and bears are on a level overall near-term technical playing field. Look for buy stops to reside just above technical resistance at $49.00 and then at $50.00. Look for sell stops just below technical support at $48.00 and then at $47.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were weaker overnight. 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. Traders today will examine the weekly USDA export inspections report.