Friday, August 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The marketplace is reacting with keener risk aversion to an ISIS terror attack in Barcelona, Spain Thursday, in which a van rain into a crowd and killed 13 people. A second attack in another town in Spain was thwarted by police, who killed five terrorists.
Gold prices are higher and hit a 2.5-month high above $1,300 an ounce on some more safe-haven demand and technical buying.
Traders and investors are also pondering the future progress of the Trump administration’s objectives. Many believe the administration is in turmoil. Trump’s remarks this week on the racial protests in Virginia have alienated him from many U.S. Republican lawmakers. This matter could make the recent U.S. stock market rally at least pause, if not prompt more significant selling pressure heading into the historically turbulent months for the stock market: September and October.
The key “outside markets” early Friday see the U.S. dollar index modestly lower. However, the greenback bulls have had a good week. A bullish weekly high close in the USDX on Friday would begin to suggest a market bottom is in place. Meantime, Nymex crude oil futures are slightly higher after hitting a three-week low Thursday. Rising U.S. shale production has weighed on the oil market late this week. A bearish weekly low close in Nymex crude oil futures on Friday would hint that the uptrend on the daily bar chart has ended.
U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly higher in early U.S. trading. Bulls still have the overall near-term technical advantage. Recent higher volatility at higher price levels is a bearish clue that a market top is in place. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,450.00 and then at this week’s high of 2,474.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,423.75 and then at 2,410.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index September futures: Prices are firmer in early U.S. trading today. Bulls have the overall near-term technical advantage, but the recent higher volatility at higher price levels is a bearish warning signal that a market top is in place. 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 5,850.00 and then at 5,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,786.50 and then at the August low of 5,761.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher and hit a seven-week high in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend in place on the daily bar chart. 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 the overnight high of 156 4/32 and then at 156 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 16/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are slightly higher and hit a seven-week high overnight. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily bar chart. 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 overnight high of 126.27.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.21.5 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.685 and then at this week’s high of 94.055. Shorter-term support is seen at the overnight low of 93.245 and then at this week’s low of 92.945. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly higher on tepid short covering after hitting a three-week low Thursday. Bulls have faded this week. Look for buy stops to reside just above technical resistance at $48.00 and then at $49.00. Look for sell stops just below technical support at this week’s low of $46.46 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were again narrowly mixed overnight. Not much new in the grains. Grain market bears remain in firm overall near-term technical control. Traders are looking ahead to the U.S. harvest of corn and soybeans, which is just a few weeks away.