Friday, August 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight, with European indexes mostly down and Asian bourses mostly up. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk appetite is still mostly upbeat to end the trading week, even though Covid-19 infections around the globe are worrisomely high and the U.S. Congress has stalled out on providing any further relief for Americans.
The U.S. economic data point of the day will be the retail sales report for July, which is expected to come in at up 2.3% from June, following a 7.5% rise seen in June.
Traders and investors will be closely watching the weekend meeting between U.S. and China trade officials, in which they will assess the “phase 1” trade deal reached in January. Many are wondering if the meeting will be cordial, given the harsh rhetoric exchanged between the world’s two largest economies in recent months.
In overnight news, the Euro zone second-quarter GDP came in at down 12.1% from the first quarter and down 15.0%, year-on-year. Those numbers were right in line with market expectations, but still dour by historical standards.
The important outside markets today see Nymex crude oil prices weaker and trading around $42.00 a barrel. The U.S. dollar index is slightly lower. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 0.69%.
Other U.S. economic data due for release Friday includes preliminary productivity and costs, manufacturing and trade inventories and sales, the University of Michigan consumer sentiment survey, and industrial production and capacity utilization.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are modestly lower in early U.S. trading, on profit taking, but still close to the record high scored in February. Bulls have the solid overall near-term technical advantage amid a 4.5-month-old price uptrend in place. 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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,382.50 and then at the record high of 3,396.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,319.50 and then at 3,300.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading. Bulls remain in solid overall technical control. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 11,266.00 and then at last week’s record high of 11,283.25. On the downside, shorter-term support is seen at 11,000.00 and then at this week’s low of 10,845.50. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading, on a corrective rebound from this week’s solid losses. Bulls have the overall near-term chart advantage but have faded this week to begin to suggest a near-term market top is in place. 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 early today. Shorter-term technical resistance is seen at 179 even and then at 179 20/32. Shorter-term support lies at this week’s low of 177 16/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the near-term technical advantage but have faded this week. 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 early today. Shorter-term resistance lies at Thursday’s high of 139.14.0 and then at 139.20.0. Shorter-term technical support lies at this week’s low of 138.28.5 and then at 138.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day. The 9-day is above 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 this week’s high of 1.1872 and then at at the August high of 1.1926. Shorter-term support is seen at the overnight low of 1.1788 and then at 1.1750. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are modestly down in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above 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 this week’s high of $42.94 and then at the August high of $43.52. Look for sell stops just below technical support at $41.50 and then at this week’s low of $41.17. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mostly weaker in early U.S. pre-market trading, on corrective pullbacks from the solid and impressive gains seen in corn and soybeans late this week. Importantly, the grain futures markets this week absorbed bearish USDA monthly supply and demand data, released Wednesday, and still traded mostly higher. Such suggests all the bearish news in the grain markets may now be factored into prices. Corn and soybean bulls are back in business, and if those markets rally, wheat will likely follow. It could also be that many traders are viewing the grains as value-buying opportunities at lower levels.
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