Tuesday, August 18–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 higher overnight and posted a new all-time high as it extends this year’s rally. The high-range trade sets the stage for a steady to higher 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 this year’s rally into uncharted territory upside targets will be hard to project. Closes below the 20-day moving average crossing at 10,963.64 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 11,328.25. Second resistance is unknown. First support is the 20-day moving average crossing at 10,963.64. Second support is the 50-day moving average crossing at 10,548.33.
The September S&P 500 was higher overnight and is poised to test February’s high crossing at 3387.60. 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. Closes above February’s high crossing at 3387.60 would open the door into uncharted territory. Closes below the 20-day moving average crossing at 3295.80 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 3387.00. Second resistance is February’s high crossing at 3387.60. First support is the 20-day moving average crossing at 3295.80. Second support is the 50-day moving average crossing at 3193.93.
Interest Rates: September T-bonds were steady to slightly higher in overnight trading as they consolidate some of the decline off August’s high. The low-range overnight trade sets the stage for steady to slightly higher opening is possible when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that a short-term top. If September extends the decline off August’s high, July’s low crossing at 177-06 is the next downside target. Closes above the 20-day moving average crossing at 180-20 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 180-20. Second resistance is August’s high crossing at 183-06. First support is last-Thursday’s low crossing at 177-16. Second support is July’s low crossing at 177-06.
September T-notes were steady to slightly higher overnight as they consolidates some of this month’s decline. The low-range overnight trade sets the stage for a steady to slightly higher opening with the day session begins trading. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 139.214 would signal that a short-term low has been posted. If September resumes this month’s decline, July’s low crossing at 138.235 is the next downside target. First resistance is August’s high crossing at 140.130. Second resistance is the March high on the weekly continuation chart crossing at 140.240. First support is last-Thursday’s low crossing at 139.285. Second support is July’s low crossing at 138.235.
Energies: October crude oil was steady to slightly lower overnight. The mid-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the 50-day moving average crossing at $40.66 would confirm that a short-term top has been posted. If October extends the rally off April’s low, the 62% retracement level of the February-April-decline crossing at $46.44 is the next upside target. First resistance is the August 5th high crossing at $43.68. Second resistance is the 62% retracement level of the February-April-decline crossing at $46.44. First support is the 50-day moving average crossing at $40.66. Second support is the July 30th low crossing at $39.00.
October heating oil was steady to slightly higher overnight. The high-range overnight trade sets the stage for a steady to slightly higher opening when the day session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If October resumes the rally off April’s low, the 38% retracement level of the January-April-decline crossing at $133.94 is the next upside target. Closes below the 50-day moving average crossing at $124.94 are needed to confirm that a short-term top has been posted. First resistance is August’s high crossing at $131.92. Second resistance is the 38% retracement level of the February-April-decline crossing at $133.94. First support is the 50-day moving average crossing at $124.94. Second support is the July 30th low crossing at $119.03.
October unleaded gas was lower overnight as it consolidated some of Monday’s rally, which posted an upside breakout of the June-August trading range. 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 October renews the rally off April’s low, the 62% retracement level of the January-March-decline crossing at $130.29 is the next upside target. Closes below the 50-day moving average crossing at $114.29 would temper the near-term friendly outlook. First resistance is Monday’s high crossing at $122.65. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 50-day moving average crossing at $114.29. Second support is the July 30th low crossing at $106.14.
October Henry natural gas was slightly higher overnight as it extends the rally off June’s low above the 87% retracement level of the May-June-decline crossing at 2.273. The high-range overnight trade sets the stage for a steady to slightly higher 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 October extends the rally off June’s low, May’s high crossing at 2.588 is the next upside target. Closes below the 20-day moving average crossing at 2.199 would confirm that a short-term top has been posted. First resistance is Monday’s high crossing at 2.525. Second resistance is May’s high crossing at 2.588. First support is the 10-day moving average crossing at 2.368. Second support is the 20-day moving average crossing at 2.199.
Currencies: The September Dollar was lower overnight and spiked to a new contract low. The low-range overnight trade sets the stage for a steady to 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. If September renews this year’s decline, the May 14th 2018-low on the weekly continuation chart crossing at 92.12 is the next downside target. Closes above the August 3rd high crossing at $93.98 are needed to confirm that a short-term low has been posted. First resistance is the August 3rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.43. First support is the overnight low crossing at $92.45. Second support is weekly support on the weekly continuation chart marked by the May 14th 2018 low crossing at 92.12.
The September Euro was higher in overnight trading as it extends the trading range of the past four-weeks. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. Closes below the August 3rd low crossing at $117.07 would signal that a short-term top has been posted. First resistance is the August 6th high crossing at $119.26. Second resistance is the 50% retracement level of the 2018-2020 decline crossing at $120.83. First support is the August 3rd crossing at $117.07. Second support is the 50-day moving average crossing at $115.08.
The September British Pound was higher overnight while extending the trading range of the past four-weeks. The high-range overnight trade sets the stage for a steady to higher opening when the day session beings trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If September resumes the rally off June’s low, the December-2019 high crossing at 1.3453 is the next upside target. Closes below the August 4th low crossing at 1.2984 would signal that a short-term top has been posted. First resistance is the 87% retracement level of the December-March decline crossing at 1.3193. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2730.
The September Swiss Franc was steady to slightly higher in overnight trading as it renewed the rally off March’s low. The mid-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September resumes the rally off April’s low, the 62% retracement level of the 2018-2020 decline crossing at 1.1178 is the next upside target. Closes below the August 3rd low crossing at 1.0829 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 1.1074. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 3rd low crossing at 1.0829. Second support is the 50-day moving average crossing at 1.0742.
The September Canadian Dollar was higher overnight as it extends the rally off March’s low. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off March’s low, January’s high crossing at 77.16 is the next upside target. Closes below the 20-day moving average crossing at 75.03 would confirm that a short-term top has been posted. First resistance is the 87% retracement level of the January-March-decline crossing at 76.04. Second resistance is January’s high crossing at 77.16. First support is the 20-day moving average crossing at 75.03. Second support is the 50-day moving average crossing at 74.24.
The September Japanese Yen was higher overnight as it extends the rally off last-week’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 are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 0.0942 would signal that a short-term low has been posted. If September renews this month’s decline, the July 20th low crossing at 0.0930 is the next downside target. First resistance is July’s high crossing at 0.0960. Second resistance is the 75% retracement level of March’s decline crossing at 0.0968. First support is the July 20th low crossing at 0.0930. Second support is July’s low crossing at 0.0925.
Precious Metals: October gold was higher overnight as it extends the rally off last-Wednesday’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 sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing at $1988.80 would signal that a short-term low has been posted. If October renews the decline off August’s high, the 50-day moving average crossing at $1862.40 is the next downside target. First resistance is the 10-day moving average crossing at $1988.80. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1862.40. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.
September silver was higher overnight as it extends the rally off last-Wednesday’s low. 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 have turned neutral to bullish signaling that sideways to higher prices are possible near-term. If September renews the rally off June’s low, the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727 is the next upside target. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. First resistance is August’s high crossing at $29.915. Second resistance is the the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727. First support is last-Wednesday’s low crossing at $23.580. Second support is the 38% retracement level of March-August-rally crossing at $22.973.
Grains: December corn was lower overnight as it consolidates some of the rally off August’s low. Monday’s crop condition report showed a two-point decline, with 69% of the crop now rated in good-to-excellent condition. However, traders were expecting a three-point drop, which led to the overnight weakness. States hit hardest by last-Monday’s storms saw the biggest declines. For example Iowa, fell ten points to 59% in good-to-excellent condition. The high-range trade sets the stage for a steady to slightly lower opening when the day sessions begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends this month’s rally, the 25% retracement level of the 2019-2020 decline crossing at $3.46 is the next upside target. Closes below the 20-day moving average crossing at $3.30 1/4 would signal that a short-term top has been posted. First resistance is the July 13th gap crossing at $3.43 3/4. Second resistance is the 25% retracement level of the 2019-2020 decline crossing at $3.46. First support is the 50-day moving average crossing at $3.37 1/4. Second support is the 20-day moving average crossing at $3.30 1/4.
December wheat was lower overnight as it consolidates some of Monday’s rally. The low-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August’s low, the July 31st high crossing at $5.42 is the next upside target. Closes below the 10-day moving average crossing at $5.09 1/2 would signal that a short-term top has been posted. First resistance is the July 31st high crossing at $5.42. Second resistance is the July 24th high crossing at $5.48 3/4. First support is last-Wednesday’s low crossing at $4.97. Second support is June’s low crossing at $4.79 1/2.
December Kansas City wheat was lower overnight as it consolidates some of the rally off August’s low. The low-range close sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 50-day moving average crossing at $4.51 3/4 would open the door for additional gains near-term. If December resumes the decline off July’s high, weekly support crossing at $4.12 is the next downside target. First resistance is the 50-day moving average crossing at $4.51 3/4. Second resistance is the reaction high crossing at $4.65 1/2. First support is August’s low crossing at $4.20 3/4. Second support is weekly support crossing at $4.12.
December Minneapolis wheat was lower overnight. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August’s low, the 50-day moving average crossing at $5.27 3/4 is the next upside target. If December renews this year’s decline, psychological support crossing at $5.00 is the next downside target. First resistance is the 50-day moving average crossing at $5.27 3/4. Second resistance is the reaction high crossing at $5.33 1/2. First support is August’s low crossing at $5.06 1/2. Second support is psychological support crossing at $5.00.
November soybeans was lower overnight as it consolidated some of Monday’s gains. The mid-range 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 November extends this month’s rally, the 62% retracement level of the January-April-decline crossing at $9.24 3/4 is the next upside target. Closes below the 50-day moving average crossing at $8.86 would confirm that a short-term top has been posted. First resistance is Monday’s high crossing at $9.17 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.24 3/4. First support August’s low crossing at $8.65 1/4. Second support is the June 29th low crossing at $8.56 3/4 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