Friday, September 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European indexes mostly up and Asian indexes mostly down. The U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The Nasdaq and S&P 500 hit record highs Wednesday and saw big downside corrections Thursday that unnerved stock traders and investors. The months of September and October can be extra turbulent for stock and financial markets.
The marketplace is awaiting Friday morning’s U.S. employment situation report for August from the Labor Department, expected to show non-farm payrolls gains of around 1.3 million. A big miss from the forecast is likely to jolt many markets.
The important outside markets today see Nymex crude oil prices firmer and trading around $41.75 a barrel. The U.S. dollar index is near steady today. The yield on the U.S. Treasury 10-year note is trading around 0.65% today.
There is no other U.S. economic data due for release Friday. U.S. markets are closed Monday for the Labor Day holiday and the unofficial end of summer.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading, on a tepid bounce after strong losses suffered Thursday. Today’s price action is extra important. Strong follow-through selling pressure and a weekly low close today would be one clue that a market top is in place. Bulls still have the firm overall near-term technical advantage amid a five-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 neutral to bearish early today. Today, shorter-term technical resistance comes in at 3,500.00 and then at 3,525.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,424.50 and then at 3,400.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are lower in early U.S. trading on follow-through pressure from strong losses Thursday. Today’s price action is extra important. Strong follow-through selling pressure and a weekly low close today would be one clue that a market top is in place. Bulls still have the firm overall technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 11,900.00 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,582.50 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls and bears are now on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 179 11/32 and then at this week’s high of 180 6/32. Shorter-term support lies at 178 15/32 and then at 178 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 139.27.5 and then at this week’s high of 140.00.5. Shorter-term technical support lies at Thursday’s low of 139.18.5 and then at 139.14.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The December Euro currency futures are slightly weaker on more profit taking after hitting a 1.5-year high Tuesday. Bulls still have the solid overall near-term technical advantage. Prices have been trending up for four months. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.1954 and then at 1.2000. Shorter-term support is seen at this week’s low of 1.1814 and then at 1.1790. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer in early U.S. trading. A price uptrend on the daily chart has been negated. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $42.00 and then at $42.50. Look for sell stops just below technical support at the overnight low of $40.84 and then at this week’s low of $40.22. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. Not much new. Bulls are in near-term technical control. The U.S. corn and soybean crops are into the final stretch toward harvest, which means the recent dry and hot weather has been factored into prices. Thus focus will be more on early harvest progress and export demand, and less on weather—unless there is frost in the forecast. Next week is expected to be much cooler but serious frost is not being mentioned by weather forecasters.
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