Friday, September 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins, with S&P 500 and Nasdaq futures at or near record highs. Traders are anxiously awaiting Friday morning’s U.S. employment situation report from the Labor Department that could in its immediate aftermath cause some volatility in markets. The August non-farm payrolls component of the jobs report is expected to see growth of 720,000 workers compared to a rise of 943,000 non-farm jobs in July.
In overnight news, U.S. Democratic Senator Joe Manchin on Thursday called for a “strategic pause” for President Biden’s $3.5 trillion tax and spending package. In a Wall Street Journal op-ed, Manchin said rising inflation and a soaring national debt necessitate a go-slow approach and a “significantly” smaller plan. Manchin is a key vote in the evenly divided Senate.
Reports say China will introduce yuan-denominated commodities futures trading that is open to foreign traders and investors. China’s State Council announced Friday it plans to offer more commodities futures, including shipping contracts. China has been gradually opening up futures trading on its commodities futures, with the goal of having more global control of commodity pricing. Foreign investors currently have access to China futures markets including crude oil, iron ore, rubber and bonded copper. The official statement announced plans to accelerate the introduction to overseas traders by building an “international commodity futures market priced and settled in renminbi.”
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil futures prices are firmer and trading around $70.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.3%.
Other U.S. economic data due for release Friday includes the U.S. services purchasing managers index (PMI), the ISM report on business services and the global services PMI.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading and poked to a contract and record high overnight. 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 4,536.00 and then at 4,550.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,491.50 and then at 4,450.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are a slightly up 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 15,686.00 and then at 15,750.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,500.00 and then at this week’s low of 15,409.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 163 27/32 and then at 164 even. Buy stops likely reside just above those levels. Shorter-term support lies at 163 even and then at this week’s low of 162 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 133.22.0 and then at 134.00.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.14.0 and then at this week’s low of 133.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading after hitting a four-week high overnight. Bears still have the overall near-term technical advantage but a downtrend on the daily bar chart has been negated to suggest a near-term market bottom is in place. The shorter-term moving averages for the Euro 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 Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1907 and then at 1.1938. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1858 and then at this week’s low of 1.1808. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are slightly up in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $70.61 and then at $71.00. Look for sell stops just below technical support at $69.00 and then at $68.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed overnight. The grain market bears have had a very good week. Hurricane Ida seriously disrupted shipping of U.S. corn and soybeans to overseas customers. Most of U.S. corn and soybean exports go through the Mississippi River and Gulf of Mexico. Technical damage has been inflicted in corn, wheat and soybeans, to suggest the path of least resistance for those markets will be sideways to lower in the near term.
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