Friday, September 1–Jim Wyckoff’s morning markets report
In overnight news, China got some upbeat economic data, as its Caixin manufacturing purchasing managers index (PMI) that came in stronger than expected at 51.0 in August versus 49.2 in July. A reading above 50.0 suggests growth in the sector. China’s central bank announced it is cutting foreign exchange reserve requirements for local banks in an effort to support the depreciating Chinese yuan that has lost more than 5% against the U.S. dollar. FOREX reserve requirements for banks will be lowered to 4% from 6% in order to improve the capacity of Chinese financial institutions to use foreign exchange funds.
Meantime, the Euro zone reported its August manufacturing PMI was 43.5 versus expectations for a reading of 43.7, and compares with the July reading of 42.7.
A busy U.S. data week will be highlighted by Friday morning’s employment situation report for August from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000, compared to a rise of 187,000 in the July report. Mostly downbeat U.S. data released so far this week has many thinking today’s jobs report will be in line with market expectations, or a bit weaker.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are higher and trading around $84.75 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching around 4.114%.
Other U.S. economic data due for release Friday includes the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, domestic auto industry sales and construction spending.
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are firmer in early U.S. trading. 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 bullish early today. Today, shorter-term technical resistance comes in at 4,600.00 and then at 4,625.00. Support for active traders is seen at Wednesday’s low of 4,546.25 and then at 4,500.00. Wyckoff’s Intra-day Market Rating: 5.5
December Nasdaq index futures: Prices are slightly higher in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 15,801.00 and then at 15,900.00. On the downside, shorter-term support is seen at Wednesday’s low of 15,556.25 and then at 15,400.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 121 31/32 and then at 123 even. Shorter-term support lies at Wednesday’s low of 120 23/32 and then at 120 even. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are a bit weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 111.03.5 and then at 111.16.0. Shorter-term technical support is seen at Wednesday’s low of 110.18.0 and then at 110.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The December Euro currency futures are near steady in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.0950 and then at this week’s high of 1.1002. Shorter-term support is seen at this week’s low of 1.0843 and then at the August low of 1.0827. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer and hit a three-week high in early U.S. trading. 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 below 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 $85.00 and then at $86.00. Look for sell stops just below technical support at the overnight low of $83.46 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were firmer in overnight trading. Not much new this week. Weather in the Midwest leans slightly bullish for soybean prices. Much of soybean crop needs rain to finish out the growing season. However, little to no rain and hotter temps are in the forecasts. Technicals are bearish for corn and wheat, and bullish for soybeans.
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