Wednesday, August 23–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed in quieter overnight trading. U.S. stock indexes are pointed to higher openings when the New York day session begins.
In overnight news, the Euro zone composite purchasing managers index (PMI) for August came in at 47.0, compared to a consensus forecast of 48.8 and the July reading of 48.6. A reading below 50.0 suggests contraction.
Traders and investors are looking ahead to the late-week annual Federal Reserve symposium held in Jackson Hole, Wyoming. This meeting usually produces some market-sensitive news from world central bankers’ comments, including Fed Chair Jerome Powell. Powell is scheduled to speak at the confab on Friday.
The key outside markets today see the U.S. dollar index higher, while Nymex crude oil futures prices are lower and trading around $78.75 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.265%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. flash and services purchasing managers indexes, new residential sales, and the weekly DOE liquid energy stocks report.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. Prices are still in a downtrend on the daily bar chart. 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 bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,440.00 and then at 4,467.25. Support for active traders is seen at this week’s low of 4,372.25 and then at the August low of 4,350.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher in early U.S. trading. Prices are still trending down on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 15,118.25 and then at 15,250.00. On the downside, shorter-term support is seen at 14,850.00 and then at the August low of 14,609.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 119 14/32 and then at 120 even. Shorter-term support lies at the overnight low of 118 12/32 and then at the contract low of 117 18/32. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher 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 to bullish early today. Shorter-term resistance lies at this week’s high of 109.22.0 and then at 110.00.0. Shorter-term technical support is seen at the contract low of 108.28.0 and then at 108.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are lower and hit a nine-week low 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0885 and then at this week’s high of 1.0944. Shorter-term support is seen at 1.0800 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are down and hit a three-week low in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $80.00 and then at this week’s high of $81.75. Look for sell stops just below technical support at $77.50 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mostly weaker in overnight trading. Weather in the Midwest is still slightly bullish for corn and soybean prices. Scorching temps and slack precip are hitting the Midwest this week. Meantime, it looks like there are better chances for grain to flow out of Ukraine in the coming months. Corn and soybean traders are closely watching the daily results from the annual Pro Farmer crop tour of the Corn Belt that takes place this week. So far, results are seeing better yields that last year in corn and soybeans, and thus a bearish lean for prices.
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