Wednesday, August 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European indexes at or near record highs and Asian shares a bit weaker. The U.S. stock indexes are pointed to mixed to weaker openings when the New York day session begins, but are still near their recent record highs. The U.S. Congress is showing some bipartisanship and is set to pass major budget and infrastructure spending bills from the Biden Administration, and that is keeping the marketplace generally upbeat at mid-week.
For the moment, traders and investors are looking past the worrisome rise of the new Covid variant, which is threatening to slow the global economic recovery, especially in China.
Traders and investors at mid-week are focusing on the U.S. consumer price index (CPI) report for July, due out shortly, which is seen coming in at up 0.5% from July versus a rise of 0.9% in June. Year-on-year, the CPI is seen up 5.3%.
The key outside markets today see the U.S. dollar index firmer and hitting a 4.5-month high overnight. Nymex crude oil futures prices are lower and trading around $67.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.369%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading after hitting a contract and record high Tuesday. Bulls have the solid overall near-term technical advantage. 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 the contract high of 4,438.25 and then at 4,465.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,400.00 and then at last week’s low of 4,365.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are a bit weaker in early U.S. trading. Bulls still have the solid chart advantage. Prices last week hit a contract and record high. 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 15,172.50 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 14,976.25 and then at the August low of 14,849.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower and hit a four-week low in early U.S. trading. Bulls are fading. A three-month-old price uptrend on the daily chart is in serious jeopardy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Tuesday’s high of 163 28/32 and then at this week’s high of 164 18/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 17/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower and hit a four-week low in early U.S. trading. A three-month-old price uptrend on the daily bar chart is in serious jeopardy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Tuesday’s high of 133.27.5 and then at this week’s high of 134.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.09.5 and then at 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are lower and hit another nine-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1777 and then at 1.1800. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1700 and then at 1.1650. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bulls are still in serious technical trouble. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-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 this week’s high of $68.90 and then at $70.00. Look for sell stops just below technical support at Tuesday’s low of $66.56 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mixed but mostly firmer overnight. Trading has turned choppy. The wheat market bulls are in firm technical control, corn bulls have the slight chart advantage and the soybean bulls and bears are on a level overall near-term technical playing field. Traders are awaiting Thursday’s USDA monthly supply and demand report, arguably the most important grain market report of the month.
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