Wednesday, August 16–Jim Wyckoff’s morning markets report
Focus remains on China’s economy. In China, the new property prices decline accelerated in July, highlighting ongoing challenges in one of the top sectors of the world’s second-largest economy. Also, Zhongrong International Trust has at least 30 products that are now overdue and Zhongrong also halted redemptions on some short-term instruments, according to Bloomberg. Reports said the company doesn’t have an immediate plan to cover the payments since its short-term liquidity has suddenly dried up. Zhongrong is among the biggest firms in China. A Wall Street Journal story today has a headline: “China struggles to halt economic slide.”
In other overnight news, the Euro zone second-quarter GDP came in at up 0.3% from the first quarter and up 0.6%, year-on-year. That was in line with market expectations.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, industrial production and capacity utilization, the FOMC minutes and the weekly DOE liquid energy stocks report.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,517.75 and then at last week’s high of 4,544.75. Support for active traders is seen at 4,425.00 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls still have the near-term technical advantage but are fading. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 15,335.00 and then at last week’s high of 15,497.75. On the downside, shorter-term support is seen at this week’s low of 15,020.75 and then at 14,900.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting a contract low Tuesday. 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 Tuesday’s high of 120 23/32 and then at this week’s high of 121 9/32. Shorter-term support lies at 120 even and then at the contract low of 119 14/32. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher on short covering after hitting a contract low Tuesday. 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 110.10.0 and then at 110.20.0. Shorter-term technical support is seen at the overnight low of 109.24.0 and then at the contract low of 109.11.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are a bit higher in early U.S. trading, on short covering. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0978 and then at 1.1035. Shorter-term support is seen at this week’s low of 1.0892 and then at 1.0850. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. 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 $892.00 and then at this week’s high of $83.20. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were higher in overnight trading, on short covering following this week’s selling pressure. The downbeat economic news out of China this week has been bearish for the grains. Weather in the Midwest leans neutral to a little friendlier for corn and soybean prices. Warmer temps and less precip are in the forecast for this week and into next week.
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