Thursday, September 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were lower overnight. U.S. stock indexes are pointed toward lower openings and at five-week lows when the New York day session begins. Risk aversion is higher on this first day of September, a month that history has shown can be a rocky one for stock and financial markets. There are new reports of major Covid lockdowns in China, the world’s second-largest economy. Reports said 21 million people have been locked down in a major industrial region of the country. Economic data out of China Friday was also dour, with the purchasing managers indexes (PMIs) and housing/property indicators showing weakness. This has prompted concerns of slowing consumer and commercial demand in China, which have pressured raw commodity markets this week, with crude oil leading the way down. Other major economies are tightening their monetary policies, which will also work to slow their growth. Many market watchers fear U.S. and global economic recessions are setting in.
Traders are awaiting Friday morning’s employment situation report from the Labor Department. That report is expected to show the key non-farm payrolls growth number at up 325,000 in August versus the July report showing a gain of 528,000 non-farm jobs.
The key outside markets today see Nymex crude oil prices lower and trading around $87.50 a barrel. The U.S. dollar index is solidly higher in early U.S. trading. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.2%. The 2-year U.S. Treasury note yield hit a 15-year high today, at 3.51%. The inverted yield curve is another clue suggesting a U.S. economic recession is imminent.
It’s a busy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job-cuts report, revised productivity and costs, the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, monthly chain store sales, domestic auto sales and construction spending.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are lower and hit a five-week low in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in Wednesday’s high of 4,035.00 and then at at this week’s high of 4,089.50. Support for active traders is seen at 3,900.00 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.0
December Nasdaq index futures: Prices are lower and hit a five-week low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,366.75 and then at Wednesday’s high of 12,578.75. On the downside, shorter-term support is seen at the overnight low of 12,188.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the 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 to bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 136 14/32 and then at this week’s high of 137 2/32. Shorter-term support lies at the overnight low of 134 19/32 and the at 134 even. Wyckoff’s Intra-Day Market Rating: 3.5
December U.S. T-Notes: Prices are lower and hit a two-month low in early U.S. trading. Prices are in a four-week-old downtrend on the daily bar chart and bears have the 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 Wednesday’s high of 117.07.5 and then at this week’s high of 117.17.0. Shorter-term technical support lies at the overnight low of 116.08.0 and then at 116.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
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 above 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 last week’s high of 1.0169 and then at 1.0200. Shorter-term support is seen at this week’s low of 1.0050 and then at the contract low of .9988. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower again and hit a two-week low in early U.S. trading. Bulls are fading fast. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $89.63 and then at $91.00. Look for sell stops just below technical support at the overnight low of $87.12 and then at the August low of $85.37. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
U.S. grain futures were lower overnight. Slumping crude oil and other raw commodity prices and keener risk aversion this week are bearish for the grain markets. Bears are gaining technical momentum, too, to suggest more price pressure in the near term. Weekly USDA export sales are delayed the next two weeks due to technical glitches.
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