Thursday, August 29–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed to higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins.
Risk appetite suddenly up-ticked overnight when news reports hit the wires that Chinese government officials (from the Commerce Ministry) have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump’s assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations.
The key “outside markets” today see Nymex crude oil prices up and trading around $56.00 a barrel. The U.S. dollar index is slightly firmer.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of second-quarter gross domestic product, and pending home sales.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls and bears are still on a level overall near-term technical playing field amid recent choppy trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 2,941.50 and then at 2,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,900.00 and then at the overnight low of 2,876.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
December Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 7,750.00 and then at 7,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,650.00 and then at 7,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are lower in early U.S. trading, on profit taking from recent gains. Bulls still have the solid 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 to neutral early today. Shorter-term technical resistance is seen at 166 even and then at the contract high of 166 25/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 30/32 and then at this week’s low of 164 9/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the solid 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 to bearish early today. Shorter-term support lies at this week’s low of 131.13.5 and then at 131.08.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 132.00.0 and then at the contract high of 132.09.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the August high of 97.950 and then at the contract high of 98.225. Shorter-term support is seen at Wednesday’s low of 97.505 and then at 97.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are higher in early U.S. trading. Bears still have the slight overall near-term technical advantage amid a six-week-old price downtrend still in place on the daily bar chart, but now just barely. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $56.75 and then at $57.13. Look for sell stops just below technical support at $56.00 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were mixed in overnight trading. Corn was up around 1 cent, soybeans up around 4 cents and wheat off about 2 cents. Grain market reacted little to the overnight news reports that Chinese government officials (from the Commerce Ministry) have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. Traders are awaiting the weekly USDA export sales report out Thursday morning. US corn sales of 400,000 to 1,000,000 metric tons (MT) are expected. Soybean sales of 150,000 to 1,000,000 MT are forecast, while US wheat sales of 250,000 to 700,000 MT are projected. Cooler weather in the Corn Belt at present and some longer-term forecasts for an early frost in the region could limit selling pressure in the grains heading into the long holiday weekend. An early frost would be especially damaging to the late-planted corn and soybean crops.
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