Friday, August 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were flat to slightly up overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session beings. Markets were quieter overnight as they await Friday morning’s U.S. jobs report for July, which is expected to show non-farm payrolls job growth of around 260,000, compared to a rise of 372,000 in the June report. A significant miss on the jobs number would likely prompt some higher markets volatility, at least briefly.
The marketplace is still a little uneasy amid the escalation in tensions between the U.S. and China, the world’s two largest economies, after U.S. House Speaker Nancy Pelosi’s visit to Taiwan this week. China is conducting aggressive military exercises around Taiwan and also announced sanctions against Nancy Pelosi and her family. U.S. Secretary of State Blinken said China’s military exercises near Taiwan are a worrisome escalation.
The key outside markets today see Nymex crude oil prices weaker and trading around $88.00 a barrel. Crude oil on Thursday hit a 4.5-month low. The U.S. dollar index is firmer in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.7%.
Other U.S. economic data due for release Friday includes the consumer credit report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are a bit weaker in early U.S. trading but near this week’s nearly two-month high. Bulls have the overall near-term technical advantage amid a price 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 and 18-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 4,173.25 and then at 4,200.00. Support for active traders is seen at 4,100.00 and then at this week’s low of 4,080.50. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are weaker in early U.S. trading and hit a three-month high overnight. Prices are trending higher on the daily bar chart and bulls have the overall near-term 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 neutral early today. Shorter-term technical resistance is seen at 13,500.00 and then at 13,700.00. On the downside, shorter-term support is seen at Thursday’s low of 13,184.75 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker in early U.S. trading. Prices are in a six-week-old price uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 technical resistance is seen at Thursday’s high of 144 8/32 and then at 145 even. Shorter-term support lies at 142 even and then at this week’s low of 141 5/32. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage amid a six-week-old uptrend in place on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Thursday’s high of 120.29.0 and then at 121.00.0. Shorter-term technical support lies at Thursday’s low of 120.03.0 and then at 119.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the firm overall near-term technical advantage. However, trading has been sideways and choppy for three weeks. 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 this week’s high of 1.0327 and then at 1.0400. Shorter-term support is seen at this week’s low of 1.0154 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading and hit a 4.5-month low Thursday. Bears have the overall near-term technical advantage. 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 bearish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at $92.00. Look for sell stops just below technical support at this week’s low of $87.55 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower overnight. Market fundamentals have become much less bullish this week. Weather forecasts have better rain chances and less high heat for the U.S. Corn Belt over the next 10 days. The window is rapidly closing for another weather market scare to play out this summer.
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