Tuesday, August 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. The U.S. stock indexes are pointed to lower openings when the New York day session begins. Risk-off attitudes are on the rise early this week. The stunningly rapid takeover of Afghanistan by the Taliban has left Americans stranded in the country and its own population running scared. This is the biggest crisis yet for the Biden Administration that was caught completely off-guard by the situation in Afghanistan.
Also, the surging Covid delta virus is starting to impact major economies, including and especially China. The U.S. is also seeing a rapid rise in cases. Traders and investors remember too well the masks and lockdowns that crippled economies just one year ago.
The marketplace is also focusing on the Federal Reserve possibly and even likely tightening its monetary policy as soon as this fall. A town hall speech by Fed Chairman Powell to educators and students today will be very closely parsed. Next week’s annual Jackson Hole Fed symposium is likely to see clarification on the Fed’s monetary policy and the timing of any upcoming actions by the central bank.
In overnight news, the Euro zone second-quarter GDP rose 2.0% from the first quarter and was up 13.6%, year-on-year. Those numbers were in line with market expectations.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are lower and trading around $67.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.23%.
It’s a very busy day for U.S. economic data Tuesday, including the weekly chain store and Johnson Redbook retail sales reports, retail sales, industrial production and capacity utilization, the NAHB housing market index, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading on more profit taking after hitting a contract and record high Monday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 contract high of 4,476.50 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,432.50 and then at last week’s low of 4,412.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the solid chart advantage and prices are not far below the recent contract and record high. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 the contract high of 15,172.50 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 14,917.25 and then at the August low of 14,849.00. 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 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 technical resistance is seen at the overnight high of 165 31/32 and then at 166 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 29/32 and then at Monday’s low of 164 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are up 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 the overnight 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 Monday’s low of 134.02.0 and then at 133.26.0. 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. 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 last week’s high of 1.1811 and then at 1.1850. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1750 and then at the August low of 1.1713. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower 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 $67.66 and then at Monday’s high of $68.27. Look for sell stops just below technical support at Monday’s low of $65.73 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were steady to mixed overnight. The wheat market bulls are in solid technical control and presently the leader of the pack, corn bulls have the firm chart advantage, and the soybean bulls have the slight overall near-term technical advantage. The big event of the week for the grain markets is the annual Pro Farmer Midwest Crop tour that got under way Monday.
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