Thursday, August 31–Jim Wyckoff’s morning markets report
The U.S. data point of the day Thursday is the personal income and outlays report for August, including the closely watched PCE inflation readings. The core PCE reading is expected to come in at up 4.2%, year-on-year, compared to up 4.1% in the July report.
The busy U.S. data week is highlighted by Friday’s employment situation report for August from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000, compared to a rise of 187,000 in the July report. Downbeat U.S. data released so far this week has many thinking Friday’s jobs report will be in line with market expectations, or a bit weaker.
In overnight news, China’s official manufacturing purchasing managers index (PMI) for August had a reading of 49.7, up from July’s 49.2 figure. The services PMI for August was 50.5 compared to 51.5 in the July report. A reading below 50.0 suggests contraction in the sector. The manufacturing PMI was below 50.0 for the fifth straight month and the services PMI declined for the sixth straight month.
The Euro zone August consumer price index came in at up 5.3%, year-on-year, which was unchanged from the July report and right in line with market expectations.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil futures prices are slightly firmer and trading around $82.00 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching around 4.1%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, personal income and outlays (including the closely watched PCE inflation numbers), the Chicago ISM business survey and the monthly retail chain store sales index.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading and hit a three-week high overnight. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,600.00 and then at 4,625.00. Support for active traders is seen at Wednesday’s low of 4,546.25 and then at 4,500.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly lower in early U.S. trading after hitting a three-week high overnight. 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 15,750.00 and then at 15,900.00. On the downside, shorter-term support is seen at Wednesday’s low of 15,556.25 and then at 15,400.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are slightly higher 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 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 121 23/32 and then at 122 even. Shorter-term support lies at Wednesday’s low of 120 23/32 and then at 120 even. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are a bit firmer 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 111.03.5 and then at 111.16.0. Shorter-term technical support is seen at Wednesday’s low of 110.18.0 and then at 110.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are lower in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1002 and then at 1.1050. Shorter-term support is seen at 1.0900 and then at this week’s low of 1.0843. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer and hit a three-week high in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below 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 $83.00 and then at the August high of $84.16. Look for sell stops just below technical support at Wednesday’s low of $80.88 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were lower in overnight trading. On tap today is the weekly USDA export sales report. Weather in the Midwest leans slightly bullish for soybean prices. Much of soybean crop needs rain to finish out the growing season. However, little to no rain and hotter temps are in the forecasts. Technicals are bearish for corn and wheat, and bullish for soybeans.
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