Wednesday, August 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed to slightly higher openings and at or near record highs when the New York day session begins. Risk appetite is keener this week as attention of the marketplace is on the annual Federal Reserve symposium held in Jackson Hole, Wyoming late this week. Fed Chair Jerome Powell is slated to speak virtually on Friday. Many traders and investors are thinking the Federal Reserve will decide to extend its easy-money policies for a longer period of time than they had reckoned just a few weeks ago, due to the rapidly spreading Covid delta variant. The marketplace that remains flush with cash continues to see much of that cash flowing into stock markets.
U.S. congressional Democrats on Tuesday agreed upon a $1 trillion spending bill for infrastructure, and that is also boosting risk appetite at mid-week.
Meantime, Asian stock markets were mostly weaker Wednesday on fears the surging coronavirus variant will once again dent economic growth in Asia.
In Europe, the closely watched German Ifo business expectations index fell in August for the second month in a row.
The key outside markets today see the U.S. dollar index a bit firmer and still trending higher. Nymex crude oil futures prices are higher and trading around $67.50 a barrel. This week’s strong rebound in crude prices suggests the market has put in a near-term bottom. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.30%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage and still have momentum. 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 contract high of 4,481.50 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,426.00 and then at 4,400.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly firmer in early U.S. trading. Bulls have the solid chart advantage and have 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 the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 15,368.25 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,200.00 and then at this week’s low of 15,076.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 164 even and then at this week’s high of 164 10/32. Buy stops likely reside just above those levels. Shorter-term support lies at 163 even and then at 162 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 133.15.0 and then at this week’s high of 133.22.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.05.0 and then at 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1790 and then at 1.1831. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1720 and then at last week’s low of 1.1690. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. It appears a near-term market bottom is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $68.00 and then at $69.00. Look for sell stops just below technical support at the overnight low of $66.92 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were weaker overnight. Corn and soybeans saw corrective pullbacks overnight after good gains posted Tuesday. Late-season rains in the U.S. Midwest and northern Plains states are providing some benefit to the crops and that’s a bit bearish at mid-week.
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