Friday, August 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were weaker in overnight trading. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Traders and investors are more downbeat on this last trading day of the week. President Trump has just ordered a ban on U.S. consumer dealings with the Chinese owners of the consumer apps TikTok and WeChat. The order is the administration’s latest salvo aimed at China, following a trade war and targeted actions against other Chinese companies. The new executive orders take effect in 45 days. The marketplace wonders what comes next in the heated rivalry between the two largest economies in the world, and two of the largest militaries.
Meantime, negotiations between U.S. Democrats and Republicans in the Congress on a new stimulus package for Americans have broken down, with President Trump threatening to take unilateral action on the matter.
In other overnight news, China’s exports rebounded strongly in July—up 7.2%, year-on-year. Its imports dropped 1.4% in the period. China’s overseas shipments to the U.S. in July rose 12.5%, year-on-year, marking the strongest increase since 2018. Some attribute the jump in U.S. exports to front-loading as relations between two nations deteriorate.
The European Union got some upbeat news Friday when German industrial production came in better than expected in June—up 8.9% from May.
Also causing trepidation early Friday is the impending release of the key U.S. data point of the week, if not the month: the jobs report for July from the Labor Department. The non-farm payrolls number is forecast to be up by around 1.25 million after rising by 4.8 million in June. However, don’t be surprised to see a miss from the forecasts, to likely move the markets.
The important outside markets today see Nymex crude oil prices weaker and trading around $41.60 a barrel. The U.S. dollar index is higher on a corrective bounce after hitting a two-year low Thursday. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.53% and near a record low.
Other U.S. economic data due for release Friday includes monthly wholesale trade and consumer credit.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading on a corrective pullback after hitting a 5.5-month high Thursday. Bulls have the solid overall near-term technical advantage amid a 4.5-month-old price uptrend in place. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-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 this week’s high of 3,345.50 and then at 3,375.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Thursday’s low of 3,300.50 and then at this week’s low of 3,254.75. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are modestly down in early U.S. trading. Bulls remain in solid overall technical control. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s record high of 11,283.25 and then at 11,400.00. On the downside, shorter-term support is seen at 11,100.00 and then at 11,000. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. Bulls have the solid near-term chart advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 183 6/32 and then at 184 even. Shorter-term support lies at Thursday’s low of 181 23/32 and then at this week’s low of 181 9/32. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the contract high of 140.13.0 and then at 140.20.0. Shorter-term technical support lies at 140.00.0 and then at this week’s low of 139.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading, on a corrective pullback after hitting a 16-month high Thursday. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1892 and then at this week’s high of 1.1926. Shorter-term support is seen at 1.1800 and then at 1.1731. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
September Nymex crude oil prices are weaker in early U.S. trading on a corrective pullback after hitting a five-month high Wednesday. Bulls have the overall near-term technical advantage. 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 even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $42.22 and then at $43.00. Look for sell stops just below technical support at $41.00 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Bears are in control amid non-threatening U.S. weather and good-looking corn and soybean crops in the U.S., as well as plentiful global wheat supplies. The next big news event for the grain markets will be next Wednesday’s monthly 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