Wednesday, September 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down in overnight trading. The U.S. stock indexes are pointed to modestly lower openings when the New York day session begins. Risk aversion is a bit keener this week, as traders and investors are more worried about global economic growth prospects amid the Delta variant of the coronavirus that continues to spread in many major economies. Last Friday’s weak U.S. jobs report has supported the aforementioned notions and also thrown a scare into the stock market bulls.
Economic data highlights the rest of this week include scheduled speeches today by U.S. Federal Reserve officials John Williams, president of the New York Fed, and Dallas Fed President Robert Kaplan. On Thursday the regular monetary policy meeting of the European Central Bank occurs. No changes in ECB interest rate policy are expected, but traders will scrutinize any language regarding cutting back on the ECB’s bond-buying program (quantitative easing).
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are higher and trading around $69.50 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.351%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly chain store and Johnson Redbook retail sales reports, the IDB/TIPP economic optimism index, and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading and not far below last week’s contract and record high. Bulls have the solid overall near-term technical advantage. The 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 is above 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 contract high of 4,539.50 and then at 4,550.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,487.50 and then at 4,465.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are a slightly down in early U.S. trading after hitting a contract and record high Tuesday. Bulls have the solid chart advantage. 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 the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the contract high of 15,702.25 and then at 15,800.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,500.00 and then at last week’s low of 15,409.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 162 26/32 and then at 163 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 161 20/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 133.12.0 and then at 133.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.00.0 and then at this week’s low of 132.28.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading after hitting a four-week high last Friday. Bears still have the overall near-term technical advantage but a downtrend on the daily bar chart has been negated to suggest a near-term market bottom is in place. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1873 and then at 1.1900. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1808 and then at 1.1775. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $70.00 and then at $71.00. Look for sell stops just below technical support at the overnight low of $68.31 and then at this week’s low of $67.64. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mostly higher overnight, on more short covering. Not much new this week. The corn and soybean market bears have the overall near-term technical advantage. Technical damage has been inflicted in corn, wheat and soybeans recently, to suggest the path of least resistance for those markets will be sideways to lower in the near term. Seasonal weakness is also a negative for the grains, amid the just-completed U.S. wheat harvest and the soon-to-begin soybean and corn harvests. The major report of the week, if not the month, for the grain markets is Friday’s USDA supply and demand report.
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