Wednesday, August 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
U.S. and world stock markets were mixed to mostly weaker overnight. President Donald Trump is in some hot water, legally, as two of his close associates are likely going to jail. This has added a bit of uncertainty to the world marketplace at mid-week. There is talk Trump could pardon those associates, or that he could be impeached. And the mid-term congressional elections are right around the corner.
Gold prices are firmer and seeing a bit of safe-haven demand on the Trump worries.
Also in focus today is the early-afternoon release of the minutes of the last meeting of the Federal Reserve’s Open Market Committee (FOMC). Past FOMC minutes releases have moved markets, although no big revelations are expected in today’s report.
Another highlight of the trading week will be the annual meeting of world central bankers in Jackson Hole, Wyoming, that begins on Friday. Past years’ meetings have produced important proclamations from world central bankers. Fed Chairman Powell is slated to speak at the symposium.
In overnight news, the German government sold a 10-year bund at an average yield of 0.33%, which is a record low. That yield compares to U.S. 10-year Treasury yields that are around 2.83%.
The key outside markets today find the U.S. dollar index lower again as the bulls are fading this week. Meantime, Nymex crude oil prices higher and trading above $66.50 a barrel.
Other U.S. economic data due for release today includes the weekly MBA mortgage applications survey, existing home sales, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower on a corrective pullback after hitting a seven-month high on Tuesday. The bulls still have the firm overall near-term technical advantage amid an uptrend in place on the daily bar chart. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 2,874.00 and then at the January high of 2,889.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,846.25 and then at 2,830.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index December futures: Prices are slightly down in early trading. Bulls still have the firm overall near-term technical advantage. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 7,452.25 and then at last week’s high of 7,479.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,352.00 and then at last week’s low of 7,316.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage amid a fledgling uptrend in place on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 145 18/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at 145 even and then at this week’s low of 144 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading and hit a 2.5-month high overnight. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 120.22.5 and then at 120.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.14.0 and then at this week’s low of 120.09.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading today, on a corrective pullback from recent gains. Bulls 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 below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 95.660 and then at 96.000. Shorter-term support is seen at the overnight low of 94.960 and then at 95.750. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bulls have regained upside momentum this week. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $67.00 and then at $67.50. Look for sell stops just below technical support at the overnight low of $65.98 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were weaker again overnight. Focus this week is on the Pro Farmer Midwest Crop Tour of corn and soybeans. Results of the tour so far are showing big U.S. crops and that’s pressuring grains.
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