Monday, August 14–Jim Wyckoff’s morning markets report
There is more dour economic news coming out of China. The Country Garden Holdings property firm is reportedly in financial trouble. The firm is the largest privately held property developer in China. The Chinese offshore yuan has weakened and is near its low for the year against the U.S. dollar, at 7.28. China’s stock market sold off Monday on the Country Garden news.
Meantime, broker SP Angel said in a morning email dispatch that China’s Zhongzhi Enterprise Group Co., one of largest wealth managers in China, missed payments to clients on multiple high-yield investment products. Four major Chinese wealth management firms managed by Zhongzhi Group are reported to have defaulted on their fixed-income products. Chinese banking regulators have set up a task force due to the scale of the default and the large number of affected clients. The move highlights the extent to which officials have been alarmed by the liquidity crunch at Zhongrong and trying to minimize contagion risks, Bloomberg reported.
In other news, Goldman Sachs economists are now forecasting the Federal Reserve will hold steady on its monetary policy until the second quarter of 2024, when at that time they expect the Fed to make an interest rate cut.
There is no major U.S. economic data due for release Monday, but the data pace picks up rapidly Tuesday.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading a bit. Prices Friday hit a four-week low. 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 week’s high of 4,544.75 and then at 4,560.75. Support for active traders is seen at last week’s low of 4,459.00 and then at 4,425.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly higher in early U.S. trading and hit a six-week low overnight. Bulls still have the near-term technical advantage but are fading a bit. 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 15.300.00 and then at last week’s high of 15,497.75. On the downside, shorter-term support is seen at 15,000.00 and then at 14,900.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are 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. 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 122 even and then at last week’s high of 123 5/32. Shorter-term support lies at the overnight low of 120 17/32 and then at 120 even. Wyckoff’s Intra-Day Market Rating: 5.5
September 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 to bearish early today. Shorter-term resistance lies at 110.16.0 and then at 119.29.0. Shorter-term technical support is seen at the overnight low of 109.30.5 and then at the August low of 109.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly lower in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.1035 and then at last week’s high of 1.1085. Shorter-term support is seen at the August low of 1.0935 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower 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 bearish early today. Look for buy stops to reside just above technical resistance at $84.00 and then at last week’s high of $84.89. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed in overnight trading. Weather in the Midwest leans a little friendlier for corn and soybean prices. Warmer temps and less precip are in the forecast for this week. On tap today is the weekly USDA export inspections and weekly crop progress reports.
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