Monday, August 24–Jim Wyckoff’s Morning Markets Report
Note: I’m back from a week’s vacation in the U.S. Rocky Mountain wilderness. Thanks for all the kind and concerned emails to me, wondering where I was. I must really like what I do because I look forward to getting back to serving you, my valued readers.—Jim
Global stock markets were higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, including the S&P 500 and Nasdaq at record highs. Risk appetite is upbeat to start the trading week, despite two tropical storms brewing in the Gulf of Mexico and wildfires raging in California and Colorado.
President Trump on Sunday announced an emergency authorization for the use of recovered Covid-19 patient blood plasma to fight off the virus. The global stock markets may have gotten a slight lift from this news.
Meantime, markets are looking past a comment Trump made to Fox News over the weekend that the U.S. does not need to do business with China. China and the U.S. appear to be moving along with their “Phase 1” trade agreement reached in January, with China buying U.S. agricultural products at a steady pace. Reports from Asia said major flooding in China in recent weeks has destroyed large tracts of crop land that will keep China on a hefty food import pace.
Gold prices are higher Monday morning, on some perceived bargain hunting as prices have backed down from the record high scored in early August and are trading below $2,000. A weaker U.S. dollar index Monday is aiding the precious metals market bulls.
Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.
The important outside markets today see Nymex crude oil prices firmer and trading around $42.65 a barrel. The U.S. dollar index is lower and not far above its recent two-year low.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly higher and hit a record high in early U.S. trading. Bulls have the solid 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 bullish early today. Today, shorter-term technical resistance comes in at 3,425.00 and then at 3,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,393.50 and then at 3,370.00. Wyckoff’s Intra-day Market Rating: 7.0
September Nasdaq index futures: Prices are solidly higher and hit a record high in early U.S. trading. Bulls remain in solid overall technical control. 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 11,676.25 and then at 11,700.00. On the downside, shorter-term support is seen at the overnight low of 11,567.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term chart advantage. 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 technical resistance is seen at the overnight high of 180 even and then at 180 16/32. Shorter-term support lies at 179 even and then at 178 16/32. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the firm near-term technical advantage. 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 last week’s high of 139.22.0 and then at 139.28.0. Shorter-term technical support lies at Friday’s low of 139.13.5 and then at 139.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices have been trending up for over three months. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.1888 and then at 1.1926. Shorter-term support is seen at the overnight low of 1.1789 and then at last week’s low of 1.1758. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
October Nymex crude oil prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage, but prices have been trading sideways at higher levels for weeks. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $43.29 and then at the August high of $43.68. Look for sell stops just below technical support at $42.00 and then at last week’s low of $41.46. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are firmer in early U.S. pre-market trading. Bulls continue to make steady progress in pushing prices up from the August lows, amid less-than-ideal late-season crop conditions for U.S. corn and soybeans. USDA this afternoon is likely to slightly lower its good to excellent ratings for both corn and soybeans. Meantime, China is keeping up its steady pace of purchases of mostly U.S. soybeans. Finally, speculators are showing more interest in the grain futures markets on the long side.
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