Friday, August 6–Jim Wyckoff’s Morning Markets Report
Note: I am on vacation this week. My friend and fellow analyst Ken Seehusen is producing my morning and afternoon reports. Ken’s format is a bit different than mine, but I think you will enjoy and benefit from his work.
The STOCK INDEXES: The September NASDAQ 100 was lower overnight as it consolidates some of Thursday’s rally, which posted a new contract high. All eyes will be on this morning’s employment report for near-term direction. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off March’s low into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 14,932.90 would signal that a short-term top has been posted. First resistance is Thursday’s high crossing at 15,172.50. Second resistance is unknown. First support is the 20-day moving average crossing at 14,932.90. Second support is the 50-day moving average crossing at 14,470.67.
The September S&P 500 was steady to higher overnight as it extends the trading range of the past two-weeks. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading later this morning. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends this year’s rally into uncharted territory, upside targets will be hard to project. Closes below the July 27th low crossing at 4364.75 would mark a downside breakout of the aforementioned trading range while opening the door for additional weakness near-term. Closes below the 50-day moving average crossing at 4297.94 would confirm that a short-term top has been posted while opening the door for a possible test of July’s low crossing at 4224.00. First resistance is the overnight high crossing at 4425.25. Second resistance is unknown. First support is the July 27th low crossing at 4364.75. Second support is the 50-day moving average crossing at 4292.79.
INTEREST RATES: September T-bonds were lower overnight. Overnight weakness sets the stage for a lower opening when the day session begins trading. Stochastics and the RSI have turned neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 164-15 would signal that a short-term top has been posted. If September renews the rally off March’s low, the 87% retracement level of the 2020-2021-decline crossing at 169-10 is the next upside target. First resistance is the 75% retracement level of the 2020-2021-decline crossing at 167-00. Second resistance is the 87% retracement level of the 2020-2021-decline crossing at 169-10. First support is the 20-day moving average crossing at 164-15. Second support is the July 22nd low crossing at 163-09.
September T-notes were lower overnight as it extends this week’s decline. Overnight weakness sets the stage for a lower opening with the day session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 134.065 would signal that a short-term top has been posted while opening the door for additional weakness near-term. If September renews its rally off March’s low, the 87% retracement level of the 2020-2021-decline crossing at 136.087 is the next upside target. First resistance is the 75% retracement level of the 2020-2021-decline crossing at 135.121. Second resistance is the 87% retracement level of the 2020-2021-decline crossing at 136.087. First support is the 20-day moving average crossing at 134.065. Second support is the 50-day moving average crossing at 133.043.
ENERGIES: September crude oil was higher overnight as is consolidates some of this week’s decline. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If September extends this week’s decline, the 25% retracement level of the 2020-2021-rally crossing at $64.67 is the next downside target. Closes above the 10-day moving average crossing at $71.25 would signal that a short-term low has been posted. First resistance is the July 30th high crossing at $74.23. Second resistance is the July 13th high crossing at $74.90. Third resistance is July’s high crossing at $76.07. First support is Thursday’s low crossing at $67.61. Second support is the 25% retracement level of the 2020-2021-rally crossing at $64.67.
CURRENCIES: The September Dollar was higher overnight as it extends the rally off July’s low. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at $92.55 are needed to signal that a short-term low has been posted. If September resumes the decline off July’s high, the 50% retracement level of the May-July-rally crossing at $91.49 is the next downside target. First resistance is the 20-day moving average crossing at $92.55. Second resistance is July’s high crossing at $93.20. First support is the 50-day moving average crossing at $91.79. Second support is the 50% retracement level of the May-July-rally crossing at $91.49.
The September Euro was lower overnight as it extends the decline off the July 30th high. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at $118.33 would signal that a short-term top has likely been posted while opening the door for additional weakness near-term. If September renews the rally off July’s low, the 38% retracement level of the May-July-decline crossing at $119.67 is the next upside target. First resistance is the 25% retracement level of the May-July-decline crossing at $118.97. Second resistance is the 38% retracement level of the May-July-decline crossing at $119.67. First support is the 20-day moving average crossing at $118.33. Second support is July’s low crossing at $117.64.
GRAINS: December corn was slightly lower overnight as it extends the trading range of the past three-weeks. The mid-range overnight trade sets the stage for a steady to lower opening when the day sessions begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the July 26th low crossing at $5.32 1/4 would open the door for a test of July’s low crossing at $5.07. If December renews the rally off July’s low, the July 6th gap crossing at $5.73 1/2 is the next upside target. First resistance is the July 6th gap crossing at $5.73 1/2. Second resistance is July’s high crossing at $6.11 1/4. First support is the July 26th low crossing at $5.32 1/4. Second support is July’s low crossing at $5.07.
September wheat was higher overnight as it consolidated some of the decline off Wednesday’s high. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at $6.91 1/4 would signal that a short-term top has been posted. If September resumes the rally off July’s low, the 87% retracement level of the May-July-decline crossing at $7.47 1/4 is the next upside target. First resistance is the 75% retracement level of the May-July-decline crossing at $7.28 1/4. Second resistance is the 87% retracement level of the May-July-decline crossing at $7.47 1/4. First support is the 10-day moving average crossing at $7.05. Second support is the 20-day moving average crossing at $6.91 1/4.
September Kansas City wheat was higher overnight as it consolidated some of the decline off Wednesday’s high. Overnight strength sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 10-day moving average crossing at $6.78 would signal that a short-term top has been posted. If September extends the rally off the July 7th low, the 87% retracement level of the May-July-decline crossing at $7.23 3/4 is the next upside target. First resistance is the 87% retracement level of the May-July-decline crossing at $7.23 3/4. Second resistance is May’s high crossing at $7.45 1/4. First support is the 10-day moving average crossing at $6.78. Second support is the 20-day moving average crossing at $6.60 1/4.
September Minneapolis wheat was higher overnight as it extends the trading range of the past six-days. Overnight strength sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the July 26th low crossing at $8.70 would confirm that a short-term top has been posted. If September renews the rally off June’s low, the September-2011 high on the monthly continuation chart crossing at $9.83 1/2 is the next upside target. First resistance is July’s high crossing at $9.44 1/2. Second resistance is the September-2012 high on the monthly continuation chart crossing at $9.83 1/2. First support is the July 26th low crossing at $8.70. Second support is the 50-day moving average crossing at $8.32 1/2.
November soybeans were higher overnight as it extends the rebound off Tuesday’s low. Overnight strength set the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $13.61 3/4 would temper the near-term bearish outlook. If November extends this week’s decline, July’s low crossing at $13.00 1/2 is the next downside target. First resistance is July’s high crossing at $14.23. Second resistance is June’s high crossing at $14.80. First support is July’s low crossing at $13.00 1/2. Second support is June’s low crossing at $12.40 1/2.
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