Friday, August 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to weaker overnight, in quieter dealings ahead of U.S. jobs report. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Gold prices are slightly higher in pre-U.S. session trading, on s mild bounce from some profit-taking pressure seen the past couple days.
Traders awaiting Friday morning’s U.S. employment report from the Labor Department, due out at 8:30 a.m. EDT. This report is arguably the most important U.S. data point of the month. Forecasts call for the key non-farm payrolls number to come in at up 180,000. The ADP national employment report on Wednesday showed a rise of 178,000 jobs. The marketplace will also be watching the hourly wage component of the jobs report. A lower-than-expected wage inflation reading could prompt ideas of still-very-low inflation pressures, which could in turn keep the Federal Reserve from raising interest rates as soon as it would like. A non-farm jobs reading on Friday morning that significantly misses market expectations is likely to impact many markets, including higher volatility in the immediate aftermath of the report.
The U.S. dollar index is slightly lower in pre-U.S. day session trading, on a tepid bounce after hitting a 13-month low on Wednesday. The Euro currency is at a 2.5-year high amid the slumping greenback and on recent generally upbeat economic data coming out of the European Union. The present postures of the dollar index and the Euro currency are still bullish for the precious metals markets.
Nymex crude oil futures are lower in early trading Friday and trading around $48.50 a barrel. Oil market watchers are looking ahead to next week’s OPEC meeting in Abu Dhabi. Many believe some OPEC members are cheating on their production quotas, and the meeting will address that matter.
Other U.S. economic data due for release Friday includes the international trade report.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly higher in early U.S. trading and just below the recent contract and record high. The bulls have the solid overall near-term technical advantage but trading has been sideways at higher levels for two weeks. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with 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 the contract high of 2,480.50 and then at 2,490.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,465.25 and then at last week’s low of 2,457.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index September futures: Prices are firmer in early U.S. trading today. The bulls have the firm overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 5,947.50 and then at 5,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,881.00 and then at 5,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady in early U.S. trading but did hit a five-week high overnight. Bulls have the overall near-term technical advantage but trading has been choppy recently. 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 early today. Shorter-term technical resistance is seen at the overnight high of 155 10/32 and then at 156 even. Buy stops likely reside just above those levels. Shorter-term support lies at 154 16/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has turned choppy. 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 early today. Shorter-term resistance lies at this week’s high of 126.15.0 and then at 126.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.05.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading. Prices hit a 13-month low on Wednesday. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 93.000 and then at this week’s high of 93.385. Shorter-term support is seen at this week’s low of 92.390 and then at 92.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Prices have been trending higher for six weeks. Look for buy stops to reside just above technical resistance at $49.00 and then at $50.00. Look for sell stops just below technical support at this week’s low of $48.37 and then at $48.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were firmer overnight, on tepid short covering in bear markets. The weather market that had played out over the past few weeks is dead. That’s bearish. Grain market traders are now focused on world supply and demand fundamentals, which favor the bears.