Tuesday, August 14–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly higher overnight, on corrective rebounds from Monday’s selling pressure. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins.
The currency markets have stabilized a bit today, following Monday’s and recent price action that have seen the world’s secondary currencies seriously depreciate against the U.S. dollar—especially the Turkish lira. Still, this matter is of serious concern to traders and investors as they worry about a contagion-type scenario that has gripped currency markets in recent history.
In other overnight news, economic data released by China shows the world’s second-largest economy is seeing its rate of growth slowing, due in part to the trade war with the U.S. Fixed-investment spending in China grew by 5.5% in the first half of the year, which is the slowest pace in nearly 20 years. Last year’s investment rate was 8.3% for the same time period. Retail sales in China also slipped a bit in July.
Meantime, German economic growth increased in the second quarter, at a 1.8% annual rate.
The key outside markets today find the U.S. dollar index slightly lower on a downside correction from recent solid gains that pushed the index to a 13-month high on Monday. Meantime, Nymex crude oil prices are higher and trading just below $68.00 a barrel. Oil prices hit a six-week low on Monday.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, import and export price indexes, and the NFIB index of small business optimism.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below 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 Monday’s high of 2,843.75 and then at last Friday’s high of 2,852.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,820.00 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are higher in early trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are still 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 Monday’s high of 7,479.00 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,419.00 and then at Monday’s low of 7,378.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading, on a corrective pullback from recent gains. Prices hit a three-week high Monday. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 11/32 and then at Monday’s high of 144 25/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 28/32 and then at 143 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading, on a corrective pullback after hitting a six-week high on Monday. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 120.08.0 and then at Monday’s high of 120.15.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.00.0 and then at 119.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is a bit weaker in early U.S. trading, on a mild corrective pullback. Bulls still 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Monday’s high of 96.390 and then at 96.500. Shorter-term support is seen at 96.000 and then at 95.440. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are firmer in early U.S. trading, on a corrective rebound after prices Friday hit a six-week low on Monday. Bulls are fading. 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 bullish early today. Look for buy stops to reside just above technical resistance at $68.50 and then at $69.00. Look for sell stops just below technical support at the overnight low of $67.35 and then at $67.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed to firmer overnight, on tepid rebounds following recent strong selling pressure that has the bears back in control of corn and soybeans, and the wheat market bulls have faded, too.
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