Tuesday, August 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
The feature in the marketplace today is a weaker U.S. dollar in the wake of remarks from President Trump to Reuters criticizing the Federal Reserve for raising interest rates. Trump reportedly said Fed Chairman Jay Powell is not doing the job the president had hoped he’d do. The Fed has raised U.S. interest rates twice this year and is likely to raise them at least one more time this year.
U.S. and world stock markets were mostly firmer overnight and brushed off Trump’s comments on the Fed.
A Chinese central bank official has reportedly said China will not use its currency, the yuan, to gain leverage in its trade war with the U.S. The yuan has dropped around 10% against the U.S. dollar since April. The U.S. is set to slap more tariffs on China’s imported products this week, despite the world’s two largest economies holding low-level trade talks later this month.
A highlight of the trading week will be the annual meeting of world central bankers in Jackson Hole, Wyoming, late this week. The Fed’s FOMC minutes are also due out Wednesday afternoon.
The other key outside market today find October Nymex crude oil futures prices slightly firmer and trading around $65.50 a barrel.
U.S. economic data due for release today is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher and hit a seven-month high in early U.S. trading. The bulls 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 bullish early today. Today, shorter-term technical resistance comes in at the January high of 2,889.00 and then at 2,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,850.25 and then at 2,830.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are higher in early trading. Bulls 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 7,434.50 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 7,369.00 and then at 7,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading, on a corrective pullback after hitting a four-week high on Monday. 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 early today. Shorter-term technical resistance is seen at Monday’s 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 Monday’s low of 144 19/32 and then at last week’s low of 144 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 in early U.S. trading, on a corrective pullback after hitting a 2.5-month high on Monday. 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 early today. Shorter-term resistance lies at Monday’s high of 120.22.0 and then at 120.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 120.09.0 and then at last week’s low of 120.01.0. 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 lower in early U.S. trading today, on a corrective pullback from recent gains. Bulls still have the firm 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 neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.660 and then at 96.000. Shorter-term support is seen at the overnight low of 95.305 and then at 95.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly up in early U.S. trading. Bulls have faded and prices are trending lower. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $66.00 and then at $67.00. Look for sell stops just below technical support at Monday’s low of $64.85 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were slightly weaker overnight. Focus this week is on the Pro Farmer Midwest Crop Tour of corn and soybeans and any fresh developments on the U.S.-China trade front.
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