Tuesday, September 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly firmer and European shares mostly weaker. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. After a long U.S. holiday weekend and the unofficial end to summer, traders and investors are more risk averse to start the U.S. trading week. President Trump on Monday said he might “decouple” the U.S. from China, in the latest salvo in a running feud between the world’s two largest economies.
In other overnight news, the Eurozone’s GDP in the second quarter came in a bit better than expected, at down a revised 11.8% from the first quarter and down 14.7%, year-on-year.
The British pound is seeing selling pressure as the U.K. and the European Union move closer to separating (Brexit).
The important outside markets today see Nymex crude oil prices solidly lower, hitting a six-week low and trading around $38.25 a barrel. Leading oil producer Saudi Arabia has announced it is cutting its oil prices due to likely decreasing demand for crude in the coming months. The U.S. dollar index is solidly higher early today. The yield on the U.S. Treasury 10-year note is trading around 0.685% today.
U.S. economic data due for release Tuesday includes the NFIB small business index, the employment trends index, the IDB/TIPP economic optimism index and consumer credit.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading, as bulls are wobbly following recent price pressure, including last Friday’s bearish weekly low close, which begins to suggest a market top is in place. Bulls still have the overall near-term technical advantage but a five-month-old price uptrend on the daily bar chart is now in jeopardy. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,447.00 and then at last Friday’s high of 3,484.25. Buy stops likely reside just above those levels. Downside support for active traders today is seen at last week’s low of 3,347.75 and then at 3,325.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are sharply lower in early U.S. trading on follow-through pressure from last week, including Friday’s bearish weekly low close that is one clue that a market top is in place. Bulls still have the overall technical advantage but a price uptrend on the daily chart has been negated, also suggesting a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 11,400.00 and then at 11,500.00. On the downside, shorter-term support is seen at last week’s low of 11,142.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 178 even and then at 178 16/32. Shorter-term support lies at the overnight low of 176 28/32 and then at 176 16/32. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the 139.20.0 and then at 139.24.0. Shorter-term technical support lies at the overnight low of 139.08.0 and then at Friday’s low of 139.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The December Euro currency futures are lower on more profit taking. Bulls still have the overall near-term technical advantage but trading has turned choppy and sideways. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1874 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1803 and then at 1.1790. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are solidly lower and hit a six-week low in early U.S. trading. A price uptrend on the daily chart has been soundly negated. 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 $39.00 and then at the overnight high of $39.59. Look for sell stops just below technical support at $37.50 and then at $37.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
US grain futures are mixed in early U.S. pre-market trading. The key “outside markets” are bearish for the grains today, as the U.S. dollar index is solidly higher and crude oil prices are solidly lower. Weather in the Corn Belt this week is expected to be much cooler but serious frost is not in the forecast. Friday’s USDA monthly supply and demand report is coming into focus. Traders today will closely examine the weekly USDA export inspections 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