Tuesday, August 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly up Tuesday, on corrective bounces from recent selling pressure. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Many of the world stock indexes, including those from the U.S., are down overall for the month of August.
Gold prices are weaker in pre-U.S.-day-session trading, on some profit taking from recent gains.
The highlight of the trading week is the annual central bankers meeting held in Jackson Hole, Wyoming, Thursday through Saturday. Highlights of central bank speakers from around the world include Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. The marketplace will closely examine the Jackson Hole speeches for clues on future monetary policy moves by the world’s major central banks. In recent years the Jackson Hole central bankers confab has significantly moved the markets.
In overnight news, the closely watched German ZEW economic expectations index for August came in at 10.0 versus 17.5 in July. The August reading was well below market expectations.
The key “outside markets” early Tuesday see the U.S. dollar index higher. The greenback has been trending higher during the month of August, but in a choppy fashion. Meantime, Nymex crude oil futures are weaker. Trading in oil has also been choppy recently.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the house price indexes, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly higher in early U.S. trading. There are early chart clues that a near-term market top is in place. 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 early today. Today, shorter-term technical resistance comes in at the overnight high of 2,437.25 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,417.75 and then at 2,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index September futures: Prices are firmer in early U.S. trading today. Bulls have faded recently. There are early chart clues that signal that a market top is in place. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 5,828.25 and then at 5,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,794.25 and then at Monday’s low of 5,752.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly lower in early U.S. trading, on profit taking. Prices last Friday hit a seven-week high. Bulls still have the firm 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 last week’s high of 156 12/32 and then at 156 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 155 17/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading, on mild profit taking. Prices last Friday hit an 11-week high. Bulls still 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 to bearish early today. Shorter-term resistance lies at the overnight high of 126.28.0 and then at last week’s high of 127.01.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 126.19.0 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher in early U.S. trading. Bears still have the overall near-term technical advantage. However trading has been choppy during August. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at 93.685 and then at last week’s high of 94.055. Shorter-term support is seen at Monday’s low of 92.920 and then at 92.830. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady. Bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Look for buy stops to reside just above technical resistance at the overnight high of $47.85 and then at $48.75. Look for sell stops just below technical support at $47.00 and then at last week’s low of $46.46. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were firmer overnight. Grain market bears remain in solid overall near-term technical control. The focus this week is on the annual Pro Farmer crop tour of the Corn Belt. Traders are looking ahead to the U.S. harvest of corn and soybeans, which is just a few weeks away.