Thursday, August 6–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. U.S. equities traders remain upbeat due in part to notions the U.S. Congress will soon come through with a new stimulus package for Americans dealing with the economic hardship of the Covid-19 pandemic.
Traders today will closely examine the weekly U.S. jobless claims report, which is expected to show new claims of around 1.4 million. Today’s report is likely to give fresh insight on notions the U.S. economic recovery is slowing down.
The Bank of England left is monetary policy unchanged at is regular meeting today, with the BOE saying negative interest rates may not be the right tool for spurring economic growth in the U.K. economy.
The U.S.-China political tensions remain near a boil, as U.S. Secretary of State Pompeo has urged Americans not to use technology products owned by China, including Alibaba, Huawei, Tencent and Baidu.
The key U.S. data point of the week will be Friday’s jobs report for July from the Labor Department. The non-farm payrolls number is forecast to be up by around 1.25 million after rising by 4.8 million in June. However, don’t be surprised to see a miss from the forecasts, to likely move the markets.
The important outside markets today see Nymex crude oil prices weaker and trading around $42.00 a barrel. The U.S. dollar index is slightly lower today and hit a two-year low overnight. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.526% and near a record low.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report and monthly retail chain store sales.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading and hit another 5.5-month high overnight. Bulls have the solid overall near-term technical advantage amid a 4.5-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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 3,329.25 and then at 3,350.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Wednesday’s low of 3,292.00 and then at this week’s low of 3,254.75. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly down 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 neutral early today. Shorter-term technical resistance is seen at Wednesday’s record high of 11,144.00 and then at 11,250.00. On the downside, shorter-term support is seen at 11,000.00 and then at 10,900. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading and near this week’s five-month high. Bulls have the solid near-term chart 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 to bullish early today. Shorter-term technical resistance is seen at this week’s high of 183 even and then at 183 16/32. Shorter-term support lies at the overnight low of 181 23/32and then at this week’s low of 181 9/32. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid 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 to bullish early today. Shorter-term resistance lies at the contract high of 140.13.0 and then at 140.20.0. Shorter-term technical support lies at 140.00.0 and then at this week’s low of 139.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
The September Euro currency futures are weaker in early U.S. trading but did hit a 16-month high overnight. Bulls have the solid overall near-term technical advantage. 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 the overnight high of 1.1926 and then at 1.1950. Shorter-term support is seen at Wednesday’s low of 1.1803 and then at Tuesday’s low of 1.1731. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are weaker in early U.S. trading on a corrective pullback after hitting a five-month high Wednesday. Bulls 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 and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $42.45 and then at $43.00. Look for sell stops just below technical support at $41.00 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 4.5
US grain futures are weaker in early U.S. pre-market trading. Traders will closely examine this morning’s weekly USDA export sales report. Non-threatening U.S. weather and good-looking corn and soybean crops in the U.S. Midwest are still fully bearish. August is under way and harvest creeps closer for corn and soybeans. Unless weather patterns significantly change the majority of the U.S. corn and soybean crops will cruise into harvest with bountiful yield potential. One saving grace for the grains is growing inflation worries that are propelling gold, silver and even crude oil prices higher. That could at some point spill over into some speculative buying interest in the beaten-up grain markets.
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.