Thursday, August 16–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
There is less risk aversion in the world marketplace today, partly on news the U.S. and China are set to hold trade talks later this month—the first negotiations in two months. However, the threat of an emerging markets economic and currency crisis is still on the minds of many traders and investors, and this matter will not just disappear. The Turkish lira, which has garnered the most scrutiny in recent weeks, is trading higher versus the U.S. dollar today.
The precious metals markets were hit especially hard Wednesday, on worries about a global economic slowdown that could be caused by a secondary currency crisis. Gold hit a 1.5-year low, silver a two-year low, platinum a 14-year low and palladium scored a 13-month low. Supposedly safe-haven gold and silver markets have not seen any significant demand surface due to the potential for a currency market contagion.
The key outside markets today find Nymex crude oil prices lower and trading just around $65.00 a barrel. Oil prices hit a seven-week low overnight and are trending lower. Meantime, the U.S. dollar index is slightly lower on a corrective pullback after hitting a 14-month high on Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and new residential construction.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. The bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below 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 this week’s high of 2,843.75 and then at 2,852.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,817.50 and then at this week’s low of 2,803.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are higher in early trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-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 7,450.00 and then at this week’s high of 7,479.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,363.25 and then at this week’s low of 7,316.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
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. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 23/32 and then at this week’s high of 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 143 27/32 and then at 143 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 120.13.0 and then at this week’s high of 120.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 120.01.0 and then at 119.28.0. 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 slightly lower on a corrective pullback after hitting a 14-month high on Wednesday. Bulls still have the solid 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 and 18-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 this week’s high of 96.865 and then at 97.000. Shorter-term support is seen at this week’s low of 96.020 and then at 95.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady in early U.S. trading and hit a seven-week low overnight. Bulls are fading and prices are trending lower. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $66.00 and then at $67.00. Look for sell stops just below technical support at the overnight low of $64.43 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were higher overnight, on corrective rebounds from recent selling pressure and on reports of new trade talks between the U.S. and Russia that will take place later this month. Traders will closely examine this morning’s 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