Tuesday, August 24–Jim Wyckoff’s Morning Markets Report
Global stock markets were flat to firmer overnight. The U.S. stock indexes are pointed to higher openings and at or near record highs when the New York day session begins. The U.S. stock index bulls are back in full technical command, to suggest still more upside in the near term. Fundamentally, traders are presently putting more emphasis on strong corporate earnings reports and recent solid U.S. economic data, and less emphasis on the surging coronavirus that may have the potential to damage major economies again in the coming months. This long-time market watcher is wondering if that pendulum will swing the other way after the U.S. Labor Day holiday, when the stock and financial markets enter what can be the historically rough waters of September and October.
The attention of the marketplace this week is on the annual Federal Reserve symposium held in Jackson Hole, Wyoming, starting Thursday. Fed Chair Jerome Powell is slated to speak virtually on Friday. The confab has been pared back a bit and parts of it will be virtual this year due to the spreading delta variant of the coronavirus. Many traders and investors are now thinking the Federal Reserve will lean less hawkish on U.S. monetary policy at the Fed symposium, due to the rapidly spreading Covid variant.
The key outside markets today see the U.S. dollar index a bit firmer and still trending higher. Nymex crude oil futures prices are higher and trading around $66.60 a barrel. This week’s strong rebound in crude prices suggests the market has put in a near-term bottom. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.267%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the Richmond Fed business survey, and new residential sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer and hit a contract and record high in early U.S. trading. Bulls have the solid overall near-term technical advantage and have momentum. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 4,481.50 and then at 4,500.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,426.00 and then at 4,400.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
December Nasdaq index futures: Prices are firmer and hit a contract and record high in early U.S. trading. Bulls have the solid chart advantage and have regained momentum. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 15,368.00 and then at 15,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 15,200.00 and then at Monday’s low of 15,076.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading. 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 this week’s high of 164 10/32 and then at last week’s high of 164 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 1/32 and then at 163 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 133.22.0 and then at 133.27.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 133.11.5 and then at 133.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1775 and then at 1.1800. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1720 and then at last week’s low of 1.1690. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading on short covering and bargain hunting after hitting a 2.5-month low on Monday. It appears a near-term market bottom is in place. 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 bullish early today. Look for buy stops to reside just above technical resistance at $67.50 and then at $68.00. Look for sell stops just below technical support at $66.00 and then at the overnight low of $65.41. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed to higher overnight. Keener general marketplace risk appetite so far this week is friendly for the grain markets. A strong rally in crude oil prices this week is also a bullish outside element for the grains.
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