Monday, August 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Asian markets were supported by moves by China’s central bank to stabilize its currency, the yuan. The yuan in recent weeks had depreciated against the U.S. dollar.
Reports over the weekend said the U.S. and Mexico could reach a deal on trade (NAFTA 2.0)as soon as today.
In overnight news, the closely watched German Ifo business sentiment survey rose more than expected in August, at 103.8 versus 101.7 in July.
The key outside markets today find the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are weaker and trading around $68.50 a barrel.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer and hit a seven-month high in early U.S. trading. The bulls have the solid overall near-term technical advantage amid an uptrend in place on the daily bar chart. 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 the January high of 2,889.00 and then at 2,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,865.00 and then at last week’s low of 2,846.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are higher and hit a contract high in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 7,755.00 and then at 7,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,498.75 and then at 7,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly up in early U.S. trading. Bulls have the overall near-term technical advantage amid an uptrend in place on the daily bar chart. 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 last week’s high of 145 29/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 145 3/32 and then at last week’s low of 144 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the 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 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 120.21.0 and then at last week’s high of 120.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.17.0 and then at last week’s low of 120.09.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly up in early U.S. trading today. The bulls still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below 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 95.625 and then at 96.000. Shorter-term support is seen at last week’s low of 94.830 and then at 94.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are weaker on mild profit taking after hitting a six-week high on Friday. Bulls still have upside momentum. 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $68.79 and then at last week’s high of $69.31. Look for sell stops just below technical support at Friday’s low of $67.78 and then at $67.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were lower overnight. Bears are in control amid big U.S. soybean and corn crop potential. Also, beneficial rains have fallen in the U.S. Corn Belt recently as the crops near maturity.
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