Friday, September 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly up and European shares mostly down. U.S. stock indexes are set for higher openings when the New York day session begins. The U.S. stock market has become a bit wobbly recently, after hitting record highs several times in August. Daily stock market volatility has picked up, but not to the point of really spooking the marketplace. Still, it’s early September and history shows that the stock and financial markets have a few more weeks of potential rough waters, and that could be extended by a few weeks this year with the U.S. elections in early November.
A feature in the marketplace this week is the slumping value of the British pound versus the U.S. dollar, falling to a six-week low amid deteriorating relations between the United Kingdom and the European Union.
The U.S. economic data point of the day is the consumer price index for August, which is seen up 0.3% from July and up 1.2%, year-on-year.
The important outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are near steady and trading around $37.25. The yield on the U.S. Treasury 10-year note is trading around 0.68% today.
U.S. economic data due for release Friday includes the consumer price index, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls still have the overall near-term technical advantage but a five-month-old price uptrend on the daily bar chart has been at least temporarily negated. The 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 is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s high of 3,414.00 and then at this week’s high of 3,436.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Thursday’s low of 3,316.75 and then at this week’s low of 3,286.00. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are higher in early U.S. trading. Bulls still have the overall technical advantage but a price uptrend on the daily chart has been negated to suggest a market top is in place. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 11,343.75 and then at 11,500.00. On the downside, shorter-term support is seen at the overnight low of 11,167.75 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. 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 the overnight high of 176 16/32 and then at 177 even. Shorter-term support lies at 175 16/32 and then at this week’s low of 175 even. Wyckoff’s Intra-Day Market Rating: 5.0
December U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at Thursday’s high of 139.16.0 and then at this week’s high of 139.20.0. Shorter-term technical support lies at Thursday’s low of 139.05.0 and then at this week’s low of 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage but trading has turned choppy and sideways at higher levels. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1941 and then at 1.2000. Shorter-term support is seen at the overnight low of 1.1843 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
October Nymex crude oil prices are near steady 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at Thursday’s high of $38.18 and then at $39.00. Look for sell stops just below technical support at the overnight low of $36.96 and then at this week’s low of $36.13. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are higher in early U.S. pre-market trading. Bulls have the near-term technical advantage in all three markets, and are having a good week. Demand from China remains strong for soybeans and even some corn. Friday’s USDA monthly supply and demand report is in focus. Many believe the report will favor the bears. Trading is likely to be more active following the midday release.
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