Tuesday, September 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. The U.S. stock indexes are also pointed toward mostly higher openings when the New York day session begins. The Nasdaq hit another record high overnight, with the S&P again hitting a record high Monday. Stock splits and the Dow Index realignment Monday have helped to boost the indexes early this week.
In focus today are manufacturing surveys for August from the major economies. The Euro zone August manufacturing purchasing managers index (PMI) came in at 51.7, which was in line with expectations but a bit below July’s reading of 51.8. A reading above 50.0 suggests growth in the sector. Meantime, China’s Caixin manufacturing PMI for August was 53.1 versus 52.8 in July and 52.5 forecast. The China August PMI is reportedly the best in over 10 years. U.S. PMI numbers are out later this morning, with the August PMI forecast at 53.5.
The Chinese yuan has appreciated to its highest level against the U.S. dollar in more than a year, currently trading around 6.85 to the greenback, due in part to the Chinese economy getting closer to being back to full speed than that of the U.S., following the Covid-19 lockdowns. Higher interest rates in China are also drawing more global investor interest in China assets.
The important outside markets today see Nymex crude oil prices higher and trading around $43.00 a barrel. The U.S. dollar index lower hit a two-year low overnight. The yield on the U.S. Treasury 10-year note is trading around 0.725% today.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. manufacturing PMI, the ISM report on business, construction spending, the global manufacturing PMI, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading and near Monday’s record high. Bulls have the solid overall near-term technical advantage amid a five-month-old price uptrend in place. There are no early chart clues to suggest a market top is close at hand. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at Monday’s record high of 3,524.50 and then at 3,550.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 3,480.75 and then at 3,464.75. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit another record high overnight. Bulls remain in solid overall technical control. 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 to bullish early today. Shorter-term technical resistance is seen at 12,300.00 and then at 12,400.00. On the downside, shorter-term support is seen at the overnight low of 12,093.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the overall near-term chart advantage as prices are trending lower. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 177 15/32 and then at 178 even. Shorter-term support lies at Monday’s low of 175 27/32 and then at last week’s low of 175 5/32. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded recently and bears are working on starting a price downtrend. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 139.12.0 and then at Monday’s high of 139.14.5. Shorter-term technical support lies at Monday’s low of 139.03.0 and then at 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are higher and hit a 1.5-year high in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices have been trending up for four months. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2001 and then at 1.2050. Shorter-term support is seen at the overnight low of 1.1938 and then at Monday’s low of 1.1887. Wyckoff’s Intra Day Market Rating: 7.0
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage, but prices have been trading sideways at higher levels for weeks. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the August high of $43.78 and then at $44.00. Look for sell stops just below technical support at the overnight low of $42.77 and then at $42.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Bulls are in near-term technical control, amid declining late-season crop conditions for U.S. corn and soybeans. Weather in the U.S. Corn Belt remains mostly dry. Demand from China remains strong. Speculators are showing more interest in the grain futures markets on the long side. Look for more upside price action in the grains in the near term.
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