Tuesday, August 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were steady to firmer in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
Trader and investor attitudes remain generally upbeat Tuesday. However, is this just a reprieve before the keener uncertainty and anxiety returns to the world marketplace? Slowing world economic growth, geopolitics that sees some hotspots and worrisomely low global inflation are all still lingering, heading into what can be turbulent trading months of September and October. My bet is that the world markets still have some rough waters and higher volatility just ahead.
President Trump continues his assault on the Federal Reserve, on Monday saying the central bank has shown a “horrendous lack of vision.” Later this week the annual Jackson Hole, Wyoming Federal Reserve confab that sees central bankers of the world attending will be extra closely monitored by the marketplace. Fed Chairman Powell speaks to the gathering Friday.
The German government today set a zero percent coupon on its new issue of 2050-dated bonds (bunds). Just a few years ago veteran market watchers would have shuddered to think that an investor would be interested in a 30-year bond that pays no interest.
The key “outside markets” today see Nymex crude oil prices near steady and trading around $56.25 a barrel. The U.S. dollar index is slightly higher.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and Goldman Sachs retail sales reports. The pace picks up Wednesday with the release of the minutes of the last FOMC meeting.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have gained the slight overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,932.25 and then at last week’s high of 2,944.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,916.00 and then at 2,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,752.00 and then at 7,789.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,700.50 and then at 7,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 165 16/32 and then at 166 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 4/32 and then at Monday’s low of 163 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at Monday’s low of 130.09.5 and then at 130.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at Monday’s high of 130.26.0 and then at 131.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit a three-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 98.300 and then at 98.445. Shorter-term support is seen at the overnight low of 98.165 and then at Monday’s low of 98.005. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. Bears have the slight overall near-term technical advantage amid a four-week-old price downtrend in place on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $56.55 and then at $57.00. Look for sell stops just below technical support at $55.50 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures prices were higher in overnight trading, on short covering from recent solid selling pressure. Corn was up around 4 cents, soybeans up about 7 cents and wheat up around 1 to 2 cents.
The key focus of the US grain markets this week will be the annual Pro Farmer Midwest crop tour that kicked off late Monday and ends late Thursday. With such variable field conditions across the Midwest, this year’s tour findings will be scrutinized extra closely.
Corn Belt weather forecasts are still calling conditions that are not threatening to the corn and soybean crops.
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