Wednesday, August 9–Jim Wyckoff’s morning markets report
There was more downbeat economic data coming out of China at mid-week. The second-largest global economy has slipped into deflation territory for the first time in two years, due to weaker consumer demand. Chinese consumer prices fell 0.3% in July, year-on-year. The reading was in line with market expectations.
Key U.S. inflation reports this week are also in focus for the marketplace. The July U.S. consumer price index it out Thursday and the producer price index is out Friday. Both the CPI and PPI are expected to uptick just a bit from the June reports.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are higher and trading around $83.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.998%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the DOE liquid energy stocks report.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the firm 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 and 18-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 last Friday’s high of 4,560.75 and then at 4,600.00. Support for active traders is seen at this week’s low of 4,482.00 and then at 4,450.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the firm near-term technical advantage. 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 to bullish early today. Shorter-term technical resistance is seen at this week’s high of 15,497.75 and then at last Friday’s high of 15,610.25. On the downside, shorter-term support is seen at this week’s low of 15,218.00 and then at 15,100.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 123 5/32 and then at 124 even. Shorter-term support lies at 122 even and then at this week’s low of 121 1/32. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 111.22.0 and then at 112.00.0. Shorter-term technical support is seen at Tuesday’s low of 110.31.0 and then at this week’s low of 110.23.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are firmer in early U.S. trading. Prices are in a three-week-old downtrend on the daily bar chart. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with 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 1.1037 and then at last week’s high of 1.1072. Shorter-term support is seen at last week’s low of 1.0935 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are higher and hit an 11-month high in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $84.00 and then at $85.00. Look for sell stops just below technical support at the overnight low of $82.67 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed in overnight trading. Downbeat economic data coming out of China this week is a bearish weight on the grains. Weather in the Midwest still leans bearish for corn and soybeans. The data point of the week for the grain markets is Friday’s USDA monthly 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