Monday, August 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed to lower openings when the New York day session begins. The market place is uneasy to start the trading week, amid a geopolitical flare-up. In stunningly rapid fashion, the Taliban has taken over Afghanistan following the recent U.S. military withdrawal from the country. Reports say there are still American citizens trapped in the country.
Meantime, the marketplace is also focusing on the prospect of the Federal Reserve tightening its monetary policy sooner than the central bank has heretofore suggested. Federal Reserve officials appear to be sounding that alarm in their comments. Some Fed watchers are now saying the tightening could come as early as this fall. The stronger-than-expected U.S. jobs report for July has helped stoke those ideas.
Weaker-than-expected economic data out of China Monday also has traders and investors edgy to start the trading week. China’s industrial production in July was up 6.4%, year on year, but the marketplace expected a rise of 7.8%. The surging delta variant of Covid-19 likely has crimped China’s economic growth and that has traders worried the same could happen to other major economies in the coming weeks/months.
The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil futures prices are lower and trading around $67.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.263%. The German 10-year bond (bund) is trading at minus 0.469% and the U.K. 10-year gilt at 0.563%.
U.S. economic data due for release Monday includes the Empire State manufacturing survey and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading on profit taking after hitting a contract and record high last Friday. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,463.25 and then at 4,480.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 4,412.25 and then at 4,365.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are a bit lower in early U.S. trading. Bulls still have the solid chart advantage and 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 below 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 last week’s low of 14,941.25 and then at the August low of 14,849.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
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 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 the overnight high of 165 13/32 and then at 166 even. Buy stops likely reside just above those levels. Shorter-term support lies at 164 16/32 and then at 164 even. 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 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 bullish early today. Shorter-term resistance lies at the overnight high of 134.12.0 and then at 134.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134.00.0 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 bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral 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 neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $68.27 and then at $69.00. Look for sell stops just below technical support at the overnight low of $66.83 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed to firmer 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 gets under way today.
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%):
- 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