Monday, August 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight, led by losses in Asia, on fears of a protracted trade war between the world’s two largest economies: the U.S. and China. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
The U.S. on Tuesday is bringing back economic sanctions on Iran that were lifted by the Obama administration as part of an Iran non-nuclear deal that President Trump cancelled. Likely rising tensions between the U.S. and Iran could be the next geopolitical flashpoint in the world marketplace. Reports said Iranians are purchasing and hoarding gold on fears of a collapse in the Iranian economy.
The key “outside markets” today find Nymex crude oil prices higher and trading around $69.50 a barrel. The U.S. dollar index is firmer today and is still not far below its 12-month high scored a few weeks ago.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. The bulls have the firm overall near-term technical advantage as prices are near the recent seven-month high. 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 bullish early today. Today, shorter-term technical resistance comes in at the July high of 2,849.50 and then at 2,870.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,820.00 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are slightly 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 above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 7,450.00 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 7,362.25 and then at 7,300.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly up in early U.S. trading, on more short covering after hitting a nine-week low last week. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 143 last week’s high of 143 16/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 28/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are near steady in early U.S. trading. Bears have the overall near-term technical advantage. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 119.24.0 and then at 119.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.16.0 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit a two-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the July high of 95.440 and then at 95.750. Shorter-term support is seen at the overnight low of 95.030 and then at Friday’s low of 94.795. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
September Nymex crude oil prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is even with 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 $70.00 and then at $70.43. Look for sell stops just below technical support at $69.00 and then at the overnight low of $68.50. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed overnight. U.S.-China trade worries have been pressuring soybeans, but corn and wheat are supported on good world supply-and-demand fundamentals. The next big report for the grains is Friday’s monthly supply-and-demand report. Weather in the Corn Belt is still mostly benign. No serious weather markets have occurred this summer and the clock is ticking for such to occur.
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