Friday, September 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher again overnight as investor risk appetite quickly returned to the world marketplace after North Korea fired a missile over Japan on Tuesday. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. U.S. stock indexes are at or close to record highs.
Gold prices are slightly lower on a corrective pullback from good gains posted Thursday, in which prices closed at a technically bullish monthly high close.
Traders and investors are awaiting the major U.S. data point of the week and arguably of the month: Friday morning’s employment situation report for August from the Labor Department. The non-farm jobs number is forecast to come in at up around 180,000. However, Wednesday’s higher-than-expected ADP jobs number has many thinking Friday’s employment report will be a miss to the upside. The wage-growth component of the jobs report will also be an important number. Look for many markets to become more active in the immediate aftermath of the jobs report, especially if it’s a miss from market expectations.
However, then look for U.S. trading activity do die down quickly, as many traders will hit the exit doors early to get a jump on the three-day Labor Day holiday weekend. Some U.S. markets close early Friday.
In overnight news, the Euro zone August manufacturing purchasing managers’ index (PMI) came in at 57.4, which was right in line with market expectations.
China’s Caixin manufacturing PMI came in at 51.6. A number above 50.0 suggests growth in the sector. China’s stock markets were boosted by the PMI data.
The U.S. dollar index is slightly lower early Friday. The greenback bears have the firm overall near-term technical advantage.
The other key outside market sees Nymex crude oil futures lower. Prices are in a four-week-old downtrend on the daily bar chart and the bears have the overall near-term technical advantage.
There is a heavy slate of other U.S. economic data due for release Friday, including the U.S. manufacturing PMI, the University of Michigan consumer sentiment survey, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are firmer and hit a three-week high in early U.S. trading. Bulls are having a very good week and have upside momentum. The 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 is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the contract high of 2,486.25 and then at 2,500.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,453.00 and then at Wednesday’s low of 2,440.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index December futures: Prices are firmer and hit a contract and record high in early U.S. trading today. The bulls have good upside momentum. 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 with the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 6,015.00 and then at 6,025.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen 5,975.00 and then at 5,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker in early U.S. trading, on profit taking after prices Tuesday hit a contract high. Bulls still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 156 5/32 and then at the contract high of 156 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at 155 15/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker in early U.S. trading, on profit taking after prices Tuesday hit a contract high. Bulls still 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 bearish early today. Shorter-term resistance lies at the overnight high of 126.28.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight high of 127.01.5 and then at the contract high of 127.10.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is weaker in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 93.060 and then at 93.340. Shorter-term support is seen at 92.000 and then at 91.750. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are weaker in early U.S. trading. Bears have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $47.50 and then at $48.00. Look for sell stops just below technical support at $46.50 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were firmer overnight. Grain market bears remain in overall near-term technical control. However, the corn market popped sharply Thursday and if there is follow-through strength today and a bullish weekly high close, then such would be a clue that a market bottom is in place (seasonal harvest low). And if corn has put in a harvest low, the soybeans and wheat markets have likely done the same.