Wednesday, September 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight, on a bevy of concerns in the marketplace. The historically turbulent months of September and October for equities are starting out in just such a manner. A recent spate of weaker-than-expected economic data coming out of the U.S. and European Union have many thinking their central banks will back off on tightening their monetary policies any time soon. Also, Hurricane Irma is bearing down on the Caribbean and later on this week is likely to hit Florida. Irma is the strongest hurricane in recorded history. And then there’s the ongoing North Korea-U.S. crisis that appears to be getting worse. All of the above have stock market investors and traders in a risk-averse mood. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Financial stocks around the world were under pressure from dovish comments from U.S. Federal Reserve Governor Lael Brainard, who said Tuesday the Fed should wait until annual inflation hits 2.0% before raising interest rates again.
Gold prices are near steady as the safe-haven metal pauses after scoring an 11-month high on Tuesday. Gold bulls are in firm technical control.
The major economic data point of the week is Thursday’s European Central Bank monetary policy meeting, including a press conference from ECB President Mario Draghi after the meeting.
The key outside markets on Wednesday morning see the U.S. dollar index weaker and not far above the recent 15-month low. Meantime, Nymex crude oil futures are firmer.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade report, the U.S. services PMI, the global services PMI, the ISM non-manufacturing report on business, and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the Tuesday’s high of 2,469.50 and then at last week’s high of 2,477.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 2,443.75 and then at 2,428.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly firmer in early U.S. trading today. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 5,965.00 and then at Tuesday’s high of 5,991.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,938.00 and then at 5,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are near steady in early U.S. trading after hitting a contract high overnight. Bulls 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 neutral early today. Shorter-term technical resistance is seen at the overnight contract high of 157 12/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at 156 16/32 and then at 156 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are slightly lower in early U.S. trading after hitting a contract high overnight. Bulls 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 neutral early today. Shorter-term resistance lies at the overnight contract high of 127.18.0 and then at 127.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 127.08.0 and then at 127.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
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 bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 92.445 and then at 92.640. Shorter-term support is seen at 91.500 and then at the contract low of 91.350. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly higher in early U.S. trading. Bears still have the slight overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $49.00 and then at $50.00. Look for sell stops just below technical support at the overnight low of $48.52 and then at $48.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were weaker overnight, on corrective pullbacks from recent good gains, especially in corn and soybeans. There are early chart clues that market bottoms are in place (seasonal harvest lows) for corn and beans.