Friday, September 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed but mostly weaker overnight. U.S. stock indexes are also pointed toward slightly lower openings when the New York day session begins.
Traders and investors are awaiting what is arguably the most important U.S. economic report of the month, due out this morning: the Labor Department’s employment situation report for August. The key non-farm payrolls component is expected to be up around 190,000. Thursday’s ADP national employment report for August came in at up 163,000 jobs, which was slightly below market expectations and hints the more important Labor non-farm jobs number today may come in light.
Emerging stock markets have slipped into bear territory, according to a closely watched index—the MSCI Emerging Markets Index. The index has dropped 20% from its recent high. There are still lingering worries about eroding emerging markets and secondary currencies creating a contagion to impact larger currencies and financial markets.
In overnight news, the Euro zone’s second-quarter GDP growth came in unrevised at up 0.4% from the first quarter. Year-on-year, GDP was up 2.1% versus the last annual estimate of up 2.2%.
The key outside markets today find the U.S. dollar index slightly lower. Meantime, Nymex crude oil prices are also slightly lower. Price action the past couple days in crude suggests the oil bulls have run out of gas and that a near-term market top is in place.
There is no other major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. The bulls still have the firm overall near-term technical advantage amid an uptrend still in place on the daily bar chart. 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 Thursday’s high of 2,897.75 and then at this week’s high of 2,916.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,872.25 and then at 2,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are slightly lower in early U.S. trading. Bulls still have the firm 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 bearish early today. Shorter-term technical resistance is seen at 7,500.00 and then at 7,550.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,436.25 and then at 7,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls still have the slight overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 143 25/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 142 28/32 and then at 142 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 weaker in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 120.07.5 and then at this week’s high of 120.09.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.26.5 and then at 119.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly down in early U.S. trading. The bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 95.280 and then at 95.500. Shorter-term support is seen at the overnight low of 94.450 and then at 94.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are near steady. The bulls appear to be exhausted to suggest a near-term market top is in place. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above 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 Wednesday’s high of $69.00 and then at $69.59. Look for sell stops just below technical support at this week’s low of $67.00 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were weaker overnight. Worries on the U.S.-world trade front continue to limit buying interest in the grains. However, very wet weather in parts of the Corn Belt at present is prompting ideas of harvest delays. Corn and soybean bears are still in control amid big U.S. crop potential. Wheat is being pulled down by corn and soybeans, despite some global production shortfalls.
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