Thursday, August 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. The U.S. stock indexes are pointed to solidly lower openings when the New York day session begins. The U.S. stock index bulls are fading this week and need to stop the bleeding very soon to avoid near-term technical damage being inflicted. Risk-off attitudes are in play this week. It appears the summertime doldrums have come to an abrupt and early end this year. The surging coronavirus delta strain is keeping traders and investors tentative, especially heading into what history shows can be the rough months of September and October for the stock markets. The chaos in Afghanistan and the botched U.S. pullout are also causing market jitters. And Wednesday afternoon’s FOMC minutes showed a still wary Fed that remains concerned about the effects of the pandemic on economies and financial markets. The Fed also continues to lean toward tightening its monetary policy as early as this fall. Traders and investors are looking ahead to the annual Federal Reserve symposium in Jackson Hole, Wyoming, next week. More clarity on U.S. monetary policy and the timing of any policy moves are likely to be revealed at that meeting.
The key outside markets today see the U.S. dollar index higher and hitting a 10.5-month high overnight. Nymex crude oil futures prices are sharply lower, hit a 2.5-month low overnight and are trading around $63.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.243%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and leading economic indicators.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly lower and hit a four-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading and need to show fresh power soon to avoid chart damage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,399.50 and then at 4,425.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,347.75 and then at 4,325.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 3.5
September Nasdaq index futures: Prices are lower and hit a four-week low in early U.S. trading. Bulls still have the chart advantage but are fading and need to show fresh power soon. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish to early today. Shorter-term technical resistance is seen at the overnight high of 14,874.75 and then at 15,000.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 14,710.50 and then at 14,600.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are solidly higher 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 166 6/32 and then at the contract high of 167 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 165 4/32 and then at this week’s low of 164 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are higher 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 bullish early today. Shorter-term resistance lies at this week’s high of 134.19.5 and then at 134.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134.05.5 and then at this week’s low of 133.29.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading and hit a 12-month low overnight. Bears have the solid overall near-term technical advantage. 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 Wednesday’s high of 1.1749 and then at Tuesday’s high of 1.1790. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1670 and then at 1.1650. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower and hit a 2.5-month low in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $64.76 and then at $65.00. Look for sell stops just below technical support at $63.00 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were lower overnight. Risk-off attitudes are bearish for the grains this week. The key outside markets are also bearish—lower crude oil and stock markets and a higher U.S. dollar index. The big event of the week for the grain markets is the annual Pro Farmer Midwest Crop tour that got under way Monday and ends with corn and soybean yield estimates on Friday.
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