Tuesday, August 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher again Tuesday, on a further apparent de-escalation of the U.S. and North Korea stand-off regarding its nuclear missiles. North Korean news reports Tuesday said President Kim Jong Un has decided not to fire missiles at Guam. The U.S. secretary of defense and secretary of state, as well as other Trump administration officials, in recent days said they are trying to achieve denuclearization of North Korea through diplomacy.
The safe-haven assets gold and U.S. Treasury bonds are seeing price pressure from the better risk appetite in the world marketplace so far this week. Gold prices are down about $11.00 an ounce in pre-U.S.-session trading Tuesday.
However, don’t expect the U.S.-North Korea confrontation to just fade away. It’s likely this situation will flare up again, and likely sooner rather than later.
In other overnight news, the U.K. consumer price index was reported down 0.1% in July and up 2.6%, year-on-year. Those numbers were a bit less than expected and continue a general pattern of exceptionally low inflation data among the major world economies.
The U.S. dollar index is higher again in early U.S. trading Tuesday, after posting good gains Monday. Meantime, Nymex crude oil futures are slightly lower in early U.S. trading. Crude oil trading has also been choppy and sideways recently. Stiff overhead resistance at the $50.00 level is keeping the bulls in check, at present.
The key U.S. economic data point of the day Tuesday is the retail sales report for July. Sales are expected to come in at up 0.4% in July versus down 0.2% in June.
Other U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, import and export prices, the Empire State manufacturing survey, manufacturing and trade inventories, the NAHB housing market index and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are modestly higher in early U.S. trading, on another bounce from last week’s selling pressure. Bulls are regaining some momentum early this week. The shorter-term moving averages (4-, 9- and 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,473.25 and then at 2,480.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,462.50 and then at 2,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index September futures: Prices are firmer in early U.S. trading today, on another corrective bounce from last week’s selling pressure. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 5,945.00 and then at last week’s high of 5,972.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,900.00 and then at 5,875.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading, amid less risk aversion. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 155 6/32 and then at Monday’s high of 155 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 12/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower on more profit taking and less risk aversion. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term resistance lies at 126.12.0 and then at the overnight high of 126.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.07.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher again in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 93.785 and then at 94.000. Shorter-term support is seen at the overnight low of 93.340 and then at 93.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly weaker and hit a three-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded a bit recently. Look for buy stops to reside just above technical resistance at $48.00 and then at $49.00. Look for sell stops just below technical support at $47.00 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were lower again overnight. Last week’s monthly USDA supply and demand report was bearish and has further sunk the grain markets. Grain market bears are in firm technical control. Traders are now looking ahead to the U.S. harvest of corn and soybeans, which is just a few weeks away.