Friday, August 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly flat overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock index bulls have had a good summer as prices have been trending higher on the daily bar charts since early June. The “sell in May and go away” stock market maxim did not work this year. However, the historically turbulent months of September and October lie just ahead for the stock market bulls.
Traders and investors are still discussing this week’s U.S. inflation reports that came in a bit tamer than expected. While this week’s CPI and PPI reports suggest U.S. inflation may have peaked, it appears the Federal Reserve will remain on its path of aggressively tightening U.S. monetary policy to tamp down still-problematic price inflation.
We are into the “dog days” of summer, whereby much of Europe is on vacation and trading volumes in many markets wanes as family vacations take traders away from the marketplace. Trading volumes may remain lighter until after the U.S. Labor Day holiday in early September.
The key outside markets today see Nymex crude oil prices weaker and trading around $93.30 a barrel. The U.S. dollar index is higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.868%.
U.S. economic data due for release Friday includes import and export price indexes and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are up in early U.S. trading after hitting a three-month high Thursday. 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 4,260.50 and then at 4,300.00. Support for active traders is seen at 4,200.00 and then at 4,150.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are slightly up in early U.S. trading after hitting a three-month high Thursday. 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 this week’s high of 13,575.00 and then at 13,750.00. On the downside, shorter-term support is seen at 13,200.00 and then at this week’s low of 12,963.25. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly up in early U.S. trading, following a sell off on Thursday. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 141 even and then at 142 even. Shorter-term support lies at the overnight low of 139 16/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the slight 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 bearish early today. Shorter-term resistance lies at 119.16.0 and then at 120.00.0. Shorter-term technical support lies at the overnight low of 118.30.5 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily bar chart. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above 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 1.0396 and then at 1.0450. Shorter-term support is seen at 1.0300 and then at 1.0250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bears have the 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 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 this week’s high of $95.05 and then at $97.00. Look for sell stops just below technical support at Thursday’s low of $91.24 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were weaker overnight. Traders are awaiting the data point of the week for the grain markets: Friday morning’s monthly USDA supply and demand report. Look for more active trading in the aftermath of the 11:00 a.m. CDT report.
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