Monday, August 17–Jim Wyckoff’s Morning Markets Report
Note: I am on vacation this week. My friend and fellow analyst Ken Seehusen is producing my morning and afternoon reports. Ken’s format is a bit different than mine, but I think you will enjoy and benefit from his work.
The STOCK INDEXES:The September NASDAQ 100 was higher overnight after the U.S. and China decided to delay trade talks on reviewing the Phase 1 trade agreement. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends this year’s rally into uncharted territory upside targets will be hard to project. Closes below the 20-day moving average crossing at 10,935.50 would confirm that a short-term top has been posted. First resistance is the August 8th high crossing at 11,283.25. Second resistance is unknown. First support is the 20-day moving average crossing at 10,935.50. Second support is the 50-day moving average crossing at 10,517.46.
The September S&P 500 was higher overnight as it extends last week’s trading range. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading later this morning. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off March’s low, February’s high crossing at 3387.60 is the next upside target. Closes below the 20-day moving average crossing at 3289.07 would confirm that a short-term top has been posted. First resistance is last-Wednesday’s high crossing at 3382.00. Second resistance is February’s high crossing at 3387.60. First support is the 20-day moving average crossing at 3289.07. Second support is the 50-day moving average crossing at 3189.87.
INTEREST RATES: September T-bonds were higher in overnight trading as they consolidate some of the decline off August’s high. The mid-range overnight trade sets the stage for steady to higher opening is possible when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that a short-term top. If September extends the decline off August’s high, July’s low crossing at 177-06 is the next downside target. Closes above the 20-day moving average crossing at 180-23 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 180-23. Second resistance is August’s high crossing at 183-06. First support is Thursday’s low crossing at 177-16. Second support is July’s low crossing at 177-06.
September T-notes were higher overnight as they consolidates some of this month’s decline. The mid-range overnight trade sets the stage for a steady to higher opening with the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If September extends this month’s decline, July’s low crossing at 138.235 is the next downside target. Closes above the 20-day moving average crossing at 139.216 would signal that a short-term low has been posted. First resistance is August’s high crossing at 140.130. Second resistance is March’s high on the weekly continuation chart crossing at 140.240. First support is last- Thursday’s low crossing at 139.285. Second support is July’s low crossing at 138.235.
ENERGY MARKETS:October crude oil was steady to slightly lower overnight. The low-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $40.56 would confirm that a short-term top has been posted. If October extends the rally off April’s low, the 62% retracement level of the February-April-decline crossing at $46.44 is the next upside target. First resistance is the August 5th high crossing at $43.68. Second resistance is the 62% retracement level of the February-April-decline crossing at $46.44. First support is the 50-day moving average crossing at $40.56. Second support is the July 30th low crossing at $39.00.
October heating oil was steady to slightly lower overnight. The low-range overnight trade sets the stage for a steady to slightly lower opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 50-day moving average crossing at $124.76 are needed to confirm that a short-term top has been posted. If October resumes the rally off April’s low, the 38% retracement level of the January-April-decline crossing at $133.94 is the next upside target. First resistance is August’s high crossing at $131.92. Second resistance is the 38% retracement level of the February-April-decline crossing at $133.94. First support is the 50-day moving average crossing at $124.76. Second support is the July 30th low crossing at $119.03.
October unleaded gas was higher overnight signaling a potential upside breakout of the June-August trading range. The low-range overnight trade sets the stage for a steady to slightly higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If October renews the rally off April’s low, the 62% retracement level of the January-March-decline crossing at $130.29 is the next upside target. Closes below the 50-day moving average crossing at $114.08 would temper the near-term friendly outlook. First resistance is the overnight high crossing at $122.65. Second resistance is the 62% retracement level of the January-March-decline crossing at $130.29. First support is the 50-day moving average crossing at $114.08. Second support is the July 30th low crossing at $106.14.
October Henry natural gas was higher overnight as it extends the rally off June’s low above the 62% retracement level of the May-June-decline crossing at 2.247. The low-range overnight trade sets the stage for a steady to slightly higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If October extends the rally off June’s low, May’s high crossing at 2.588 is the next upside target. Closes below the 20-day moving average crossing at 2.167 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 2.525. Second resistance is May’s high crossing at 2.588. First support is the 10-day moving average crossing at 2.353. Second support is the 20-day moving average crossing at 2.167.
CURRENCIES: The September Dollar was slightly lower overnight as it extends this month’s trading range. The mid-range overnight trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. If September renews this year’s decline, the May 14th 2018-low on the weekly continuation chart crossing at 92.12 is the next downside target. Closes above the August 3rd high crossing at $93.98 are needed to confirm an upside breakout of the aforementioned trading range. First resistance is the August 3rd high crossing at $93.98. Second resistance is the 50-day moving average crossing at $95.51. First support is August’s low crossing at $92.48. Second support is weekly support on the weekly continuation chart marked by the May 14th 2018 low crossing at 92.12.
The September Euro was steady to slightly higher in overnight trading as it extends the trading range of the past four-weeks. The mid-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews the rally off May’s low, the 50% retracement level of the 2018-2020 decline crossing at $120.83 is the next upside target. Closes below the August 3rd low crossing at $117.07 would signal that a short-term top has been posted. First resistance is the August 6th high crossing at $119.26. Second resistance is the 50% retracement level of the 2018-2020 decline crossing at $120.83. First support is the August 3rd crossing at $117.07. Second support is the 50-day moving average crossing at $114.96.
The September British Pound was lower overnight while extending the trading range of the past four-weeks. The low-range overnight trade sets the stage for a steady to lower opening when the day session beings trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the August 4th low crossing at 1.2984 would signal that a short-term top has been posted. If September resumes the rally off June’s low, the December-2019 high crossing at 1.3453 is the next upside target. First resistance is the 87% retracement level of the December-March decline crossing at 1.3193. Second resistance is the December-2019 high crossing at 1.3453. First support is the August 4th low crossing at 1.2984. Second support is the 50-day moving average crossing at 1.2721.
The September Swiss Franc was steady to slightly higher in overnight trading as it extends the trading range of the past four-weeks. The mid-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If September resumes the rally off April’s low, the 62% retracement level of the 2018-2020 decline crossing at 1.1178 is the next upside target. Closes below the August 3rd low crossing at 1.0829 would confirm that a short-term top has been posted. First resistance is the August 6th high crossing at 1.1062. Second resistance is the 62% retracement level of the 2018-2020 decline crossing at 1.1178. First support is the August 3rd low crossing at 1.0829. Second support is the 50-day moving average crossing at 1.0730.
The September Canadian Dollar was higher overnight and working on a possible inside day. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought, diverging and are turning neutral to bearish signaling that a short-term top might be in or is near. If September extends the rally off March’s low, the 87% retracement level of the January-March-decline crossing at 76.04 is the next upside target. Closes below the 20-day moving average crossing at 74.94 would confirm that a short-term top has been posted. First resistance is last-Thursday’s high crossing at 75.81. Second resistance is the 87% retracement level of the January-March-decline crossing at 76.04. First support is the 20-day moving average crossing at 74.94. Second support is the 50-day moving average crossing at 74.21.
The September Japanese Yen was steady to slightly higher overnight as it consolidates some of the decline off July’s high. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If September extends this month’s decline, the July 20th low crossing at 0.0930 is the next downside target. Closes above the 20-day moving average crossing at 0.0943 would signal that a short-term low has been posted. First resistance is July’s high crossing at 0.0960. Second resistance is the 75% retracement level of March’s decline crossing at 0.0968. First support is the July 20th low crossing at 0.0930. Second support is July’s low crossing at 0.0925.
PRECIOUS METALS: October gold was higher overnight as it consolidates some of its declines off August’s high. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing at $1988.00 would signal that a short-term low has been posted. If October renews the decline off August’s high, the 50-day moving average crossing at $1856.00 is the next downside target. First resistance is the 10-day moving average crossing at $1988.00. Second resistance is August’s high crossing at $2078.00. First support is the 50-day moving average crossing at $1856.00. Second support is the 38% retracement level of the 2018-2020-rally crossing at $1775.80.
September silver was higher overnight as it consolidates some of last-Friday’s decline. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading later this morning. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If September renews the rally off June’s low, the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727 is the next upside target. Closes below last-Wednesday’s low crossing at $23.580 would confirm that a short-term top has been posted. First resistance is August’s high crossing at $29.915. Second resistance is the the 50% retracement level of the 2011-2020 decline on the weekly continuation chart crossing at 30.727. First support is last-Wednesday’s low crossing at $23.580. Second support is the 38% retracement level of March-August-rally crossing at $22.973.
September copper was higher overnight. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral signaling that sideways to higher trading is possible near-term. Closes above the 20-day moving average crossing at 2.8908 would signal that a short-term low has been posted. If September extends the decline off July’s high, the 25% retracement level of the March-July-rally crossing at 2.7419 is the next downside target. First resistance is the July 13th high crossing at 2.9930. Second resistance is the 75% retracement level of the 2018-2020 decline crossing at 3.0598. First support is the 50-day moving average crossing at 2.7968. Second support is the 25% retracement level of the March-July-rally crossing at 2.7419.
GRAINS: December corn gapped up and was higher overnight as it extends last-week’s short covering rally. Stronger old and new-crop demand, which lowered this year’s projected ending stocks helped to trigger last week’s short covering rally. Also last week’s Derecho storm that cause significant damage to the corn crop across portions of Iowa, Wisconsin, portions of Illinois could reduce this year’s ending stocks by 50 to 300 million bushels when this year’s final crop size is determined. One more factor that has yet to garner much attention is much of Iowa along with portions of the eastern corn belt are in need to rain and soon or further yield losses appear likely. The high-range trade sets the stage for a steady to higher opening when the day sessions begins trading. Stochastics and the RSI are becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends this month’s rally, the July 13th gap crossing at $3.43 3/4 is the next upside target. Closes below the 10-day moving average crossing at $3.28 would signal that this month’s rally has ended. If December renews the decline off July’s high, weekly support crossing at $3.00 1/4 is the next downside target. First resistance is the July 13th gap crossing at $3.43 3/4. Second resistance is July’s high crossing at $3.63. First support is last-Wednesday’s low crossing at $3.20. Second support is weekly support crossing at $3.00 1/4.
December wheat was higher overnight as it consolidates some of the decline off July’s high. The high-range trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at $5.21 3/4 would signal that a short-term low has been posted. If December renews the decline off July’s high, June’s low crossing at $4.79 1/2 is the next downside target. First resistance is the 50-day moving average crossing at $5.17. Second resistance is the 20-day moving average crossing at $5.21 3/4. First support is last-Wednesday’s low crossing at $4.97. Second support is June’s low crossing at $4.79 1/2.
December Kansas City wheat was higher overnight as it extends the rally off August’s low. The mid-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at $4.42 would signal that a short-term low has been posted. If December resumes the decline off July’s high, weekly support crossing at $4.12 is the next downside target. First resistance is the 20-day moving average crossing at $4.42. Second resistance is the 50-day moving average crossing at $4.52 1/4. First support is August’s low crossing at $4.20 3/4. Second support is weekly support crossing at $4.12.
December Minneapolis wheat was higher overnight. The high-range overnight trade sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at $5.18 would signal that a short-term low has been posted. If December renews this year’s decline, psychological support crossing at $5.00 is the next downside target. First resistance is the 20-day moving average crossing at $5.18. Second resistance is the 50-day moving average crossing at $5.28 1/2. First support is August’s low crossing at $5.06 1/2. Second support is psychological support crossing at $5.00.
November soybeans gapped up and were higher overnight as they extend the short covering rally off last-Monday’s low. Strong export demand along with persistent dryness across large portions of Iowa and portions of the eastern corn belt are helping to underpin the rally off August’s low. The high-range trade sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If November extends this month’s rally, July’s high crossing at $9.12 1/2 is the next upside target. Closes below the 10-day moving average crossing at $8.84 would confirm that a short-term top has been posted. First resistance is July’s high crossing at $9.12 1/2. Second resistance is the 62% retracement level of the October-April decline crossing at $9.25 1/4. First support August’s low crossing at $8.65 ¼. Second support is the June 29th low crossing at $8.56 3/4 1/2.
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