Wednesday, August 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were steady to weaker overnight. U.S. stock indexes are pointed toward higher openings when the New York day session beings. Trader and investor anxiety has somewhat receded at mid-week. U.S. House Speaker Nancy Pelosi visited Taiwan Tuesday evening without incident…yet. China has vowed retaliation over her visit and plans on conducting a large-scale military exercise around Taiwan.
In overnight news, the Euro zone producer price index for June was up 35.8%, year-on-year, due to soaring energy costs in Europe.
U.S. Treasury yields have up-ticked this week as U.S. Federal Reserve officials this week reiterated they plan to keep raising U.S. interest rates to choke off problematic price inflation. The yield on the 10-year U.S. Treasury note is fetching 2.75%.
The key outside markets today see Nymex crude oil prices weaker and trading around $93.75 a barrel. Traders are awaiting an OPEC meeting Wednesday. The U.S. dollar index is slightly lower in early U.S. trading.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. services PMI, the global services PMI, the weekly DOE liquid energy stocks report, the ISM report on business services, and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are a bit higher in early U.S. trading. 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 4,147.25 and then at 4,200.00. Support for active traders is seen at 4,050.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 13,108.75 and then at 13,300.00. On the downside, shorter-term support is seen at this week’s low of 12,814.75 and then at 12,600.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Prices are in a six-week-old price uptrend on the daily bar chart but bulls are fading at mid-week. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 143 10/32 and then at 144 even. Shorter-term support lies at 141 16/32 and then at 141 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage amid a six-week-old uptrend in place on the daily bar chart. However, the bulls have faded at mid-week. 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 bearish early today. Shorter-term resistance lies at the overnight high of 120.16.0 and then at 120.24.0. Shorter-term technical support lies at 119.20.0 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are slightly up in early U.S. trading. Bears have the firm overall near-term technical advantage. However, trading has been sideways and choppy for three weeks. 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 early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0327 and then at 1.0400. Shorter-term support is seen at last week’s low of 1.0134 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are a bit weaker in early U.S. trading. Bulls and bears are on a level near-term technical playing field. 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 Tuesday’s high of $96.47 and then at this week’s high of $98.65. Look for sell stops just below technical support at this week’s low of $92.42 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were firmer overnight on corrective rebounds from selling pressure seen earlier this week. The first Ukrainian grain shipments out of the Black Sea region are occurring this week. Also, weather forecasters this week have added better rain chances for the U.S. Corn Belt over the next week. Most U.S. soybeans see the critical growing period during August. Corn and soybean bulls and bears are on a level overall near-term technical playing field amid choppy trading, while wheat bears have the firm near-term technical advantage.
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