Wednesday, September 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock indexes are trending down on the daily charts. Risk aversion remains elevated in the general marketplace. That’s due in part to
overnight news that Chinese imports and exports fell more than expected in August as the world’s second-largest economy continues to stall amid Covid lockdowns, a wobbly property market and a weaker yuan. “The headwinds facing the Chinese economy are becoming increasingly fierce and recent efforts to shore it up have appeared inadequate,” said an email dispatch from analyst Craig Erlam with OANDA.
In other overnight news, the revised Euro zone second-quarter GDP rose 0.8% from the second quarter and compares to the initial estimate of up 0.6%. On an annual basis, second-quarter Euro zone GDP showed a growth rate of 4.1%.
The Bank of Canada monetary policy meeting conclusion is today. The European Central Bank meets Thursday and many expect the ECB to raise its main interest rate by 75 basis points.
The key outside markets today see Nymex crude oil prices firmer and trading around $87.50 a barrel. The U.S. dollar index is higher and touched another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 3.3%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the international trade report, the Johnson Redbook weekly retail sales report, and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading but hit a six-week low overnight. 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 early today. Today, shorter-term technical resistance comes in Tuesday’s high of 3,978.50 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,900.00 and then at 3,875.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher in early U.S. trading and hit a six-week low overnight. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 12,314.00 and then at 12,500.00. On the downside, shorter-term support is seen at the overnight low of 11,996.50 and then at 11,800.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are near steady in early U.S. trading and hit an 11-week low overnight. Prices are in a five-week-old downtrend on the daily bar chart and bears have the firm advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at 133 even and then at 134 even. Shorter-term support lies at 132 even and the at 131 even. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are firmer in early U.S. trading but hit an 11-week low overnight. Prices are in a five-week-old downtrend on the daily bar chart and bears have the firm technical advantage. 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 neutral to bullish early today. Shorter-term resistance lies at 116.00.0 and then at 116.08.0. Shorter-term technical support lies at the overnight low of 115.13.5 and then at 115.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The December Euro currency futures are slightly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.0100 and then at 1.0150. Shorter-term support is seen at the contract low of .9935 and then at .9900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer in early U.S. trading but hit a nearly six-month low overnight. The shorter-term moving averages are neutral early today as the 4-day is below 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 early today. Look for buy stops to reside just above technical resistance at $88.00 and then at $90.00. Look for sell stops just below technical support at the overnight low of $85.08 and then at $84.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to higher overnight, with wheat solidly up. Short covering was featured. The corn market is trending up and the bulls have the chart advantage. Soybean prices are chopping sideways and bulls and bears are on a level technical playing field. Wheat prices are trading sideways at lower levels and the bears still have the technical advantage.
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