Thursday, September 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down in overnight trading. The U.S. stock indexes are pointed to modestly lower openings when the New York day session begins. Trader and investor risk appetite is less robust this week. The resurgence of the delta variant of Covid in major economies has the marketplace more pensive.
In overnight news, China reported its August consumer price index up 0.8%, year-on-year, which was below expectations for a rise of 1.0%.
In a Wall Street Journal interview, Federal Reserve Bank of Atlanta President Raphael Bostic said recent weaker U.S. economic data has likely pushed back the start of the Fed’s tapering of its bond-buying program (quantitative easing), but added he still expects a U.S. interest rate hike in late 2022.
Traders are awaiting the results of the regular monetary policy meeting of the European Central Bank that is in progress as of this writing. No changes in ECB interest rate policy were expected, but traders will scrutinize any language or action on cutting back on the ECB’s bond-buying program.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are slightly higher and trading around $69.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.327%.
U.S. economic data due for release Thursday includes the weekly jobless claims report and the weekly DOE liquid energy stocks report. Several Federal Reserve officials will participate in an economic forum today.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker in early U.S. trading but not far below last week’s contract and record high. Bulls have the firm overall near-term technical advantage. Prices are still in a longer-term uptrend on the charts. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,539.50 and then at 4,550.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,476.25 and then at 4,450.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index futures: Prices are a slightly down in early U.S. trading after hitting a contract and record high Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 15,702.25 and then at 15,800.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,500.00 and then at last week’s low of 15,409.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are modestly higher in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 163 even and then at 163 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at this week’s low of 161 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are slightly firmer in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 133.12.5 and then at 133.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.00.0 and then at this week’s low of 132.28.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly up in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.1873 and then at 1.1900. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1808 and then at 1.1775. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly higher 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 neutral early today. Look for buy stops to reside just above technical resistance at $70.00 and then at $71.00. Look for sell stops just below technical support at Wednesday’s low of $68.31 and then at this week’s low of $67.64. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were lower overnight. The corn and soybean market bears have the overall near-term technical advantage and the wheat bulls are fading, too. Technical damage has been inflicted in corn, wheat and soybeans recently, to suggest the path of least resistance for those markets will be sideways to lower in the near term. Seasonal weakness is also a negative for the grains, amid the just-completed U.S. wheat harvest and the soon-to-begin soybean and corn harvests. The major report of the week, if not the month, for the grain markets is Friday’s USDA supply and demand report. Weekly USDA grain export sales data is also out Friday morning.
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