Tuesday, August 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session beings. It’s a risk-off trading day in the marketplace Tuesday, amid U.S.-China tensions on the rise as U.S. House Speaker Nancy Pelosi is reportedly set to visit Taiwan Tuesday evening. China has vowed retaliation.
Overnight news that the U.S. military killed the leader of Al Qaida in a drone strike in Kabul had little impact on markets.
The key outside markets today see Nymex crude oil prices firmer and trading around $94.50 a barrel. Traders are awaiting an OPEC meeting Wednesday. The U.S. dollar index is slightly higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.56%.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and chain store sales retail reports. A couple of Federal Reserve officials also speak today.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading, on a corrective pullback after prices hit a seven-week high last Friday. Bulls still have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,147.25 and then at 4,200.00. Support for active traders is seen at 4,050.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are weaker in early U.S. trading, on a downside correction after prices hit a nearly three-month high last Friday. Prices are trending higher on the daily bar chart and bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,975.75 and then at this week’s high of 13,108.75. On the downside, shorter-term support is seen at last Friday’s low of 12,744.25 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher and hit a nearly four-month high in early U.S. trading. Prices are in a six-week-old price uptrend 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 145 31/32 and then at 147 even. Shorter-term support lies at the overnight low of 144 27/32 and then at 144 even. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are higher and hit a nearly four-month high in early U.S. trading. Bulls have the overall near-term technical advantage amid a six-week-old 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 and 18-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 122.02.0 and then at 122.10.0. Shorter-term technical support lies at this week’s low of 120.27.0 and then at 120.17.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the firm overall near-term technical advantage. However, trading has been sideways and choppy for over two weeks. The shorter-term moving averages for the Euro 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 Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0327 and then at 1.0400. Shorter-term support is seen at last week’s low of 1.0134 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are a bit firmer in early U.S. trading. Bulls and bears are on a level near-term technical playing field. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $98.65 and then at $100.00. Look for sell stops just below technical support at this week’s low of $92.42 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were lower again overnight. The first Ukrainian grain shipment out of the Black Sea region has occurred. Also, weather forecasters have added some better rain chances for the U.S. Corn Belt over the next several days. Most U.S. soybeans see the critical growing period during August. Corn and soybean bulls and bears are on a level overall near-term technical playing field amid choppy trading, while wheat bears have the firm near-term 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