Wednesday, August 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, including a new record high in the Nasdaq stock index. Hopes of a new U.S. government stimulus package for Americans coming soon are rising at mid-week on reports Democrats and Republicans are coming closer to agreement on a package. Rising crude oil prices that hit a five-month high overnight are also giving traders and investors a boost.
On tap Wednesday is the ADP national employment report for July, which is expected to show U.S. jobs growth of around 1 million. This report could move the markets when it’s released at 8:30 a.m. EDT.
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.
Gold and silver are continuing on a bullish rampage, with gold futures up over $30 an ounce today and hitting a record high of $2,045.20 overnight, basis October Comex futures. Silver hit a seven-year high of $26.975, basis September Comex futures. Both metals continue to see support from safe-haven demand amid the worrisome rise in Covid-19 infections, geopolitics and concerns about problematic price inflation in the coming months. As the U.S. Congress appears to be getting closer to a new round of government stimulus payments to Americans, such would only add to the massive influx of liquidity into the world financial system, which has created the inflation concerns.
The important outside markets today see Nymex crude oil prices higher, hitting a five-month high and trading around $42.75 a barrel. The U.S. dollar index is solidly lower today. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.52% and near a record low.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP jobs report, the international trade report, the U.S. services PMI, the global services PMI, the ISM report on business services, and the weekly DOE liquid energy stocks report.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher 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 bullish early today. Today, shorter-term technical resistance comes in at 3,350.00 and then at the February high of 3,396.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,292.00 and then at this week’s low of 3,254.75. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are firmer in early U.S. trading and hit another record high overnight. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 11,144.00 and then at 11,250.00. On the downside, shorter-term support is seen at the overnight low of 11,055.75 and then at 11,000. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading after hitting a five-month high overnight. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 183 even and then at 183 16/32. Shorter-term support lies at 182 even and then at this week’s low of 181 9/32. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading after hitting a contract high overnight. 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 bearish 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: 4.5
The September Euro currency futures are higher in early U.S. trading. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1871 and then at last week’s high of 1.1919. Shorter-term support is seen at the overnight low of 1.1803 and then at Tuesday’s low of 1.1731. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
September Nymex crude oil prices are solidly higher and hit a five-month high in early U.S. trading. Bulls have gained momentum this week. 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 bullish early today. Look for buy stops to reside just above technical resistance at $43.00 and then at $44.00. Look for sell stops just below technical support at $42.00 and then at $41.00. Wyckoff’s Intra-Day Market Rating: 6.5
US grain futures are firmer in early U.S. pre-market trading, on tepid short covering following solid losses suffered Tuesday, including corn hitting a contract low. Non-threatening U.S. weather and good-looking corn and soybean crops in the U.S. Midwest are bearish. August is now 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 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.