Asian and European stocks were mostly up overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session beings. Global equity markets have been boosted recently by notions of easier monetary policies coming soon from the major central banks of the world. Some progress on the U.S.-China trade front this week is also bullish for world stocks.
The European Central Bank is holding its regular monetary policy meeting on Thursday, with results due out soon. Some expect the ECB to lower interest rates today. Next week, the U.S. Federal Reserve’s Open Market Committee (FOMC) has its money policy meeting, and is expected to ease monetary policies at the meeting.
Slowing global economic growth has the central bankers worried. There was another downbeat report coming out of Germany today, as the Ifo business climate index fell in July.
The key “outside markets” today see Nymex crude oil prices higher and trading around $56.50 a barrel. Meantime, the U.S. dollar index is slightly weaker after hitting a five-week high Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the advance economic indicators report, durable goods orders, and the Kansas City Federal Reserve manufacturing survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly down in early U.S. trading bit did poke to a new contract and record high overnight. Bulls have the solid overall near-term technical advantage. There are no early chart clues of a market top being close at hand. 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 3,024.75 and then at 3,035.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2,996.00 and then at 2,987.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are weaker in early U.S. trading after hitting a record and contract high Wednesday. Bulls have the solid overall near-term technical advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 8051.75 and then at 8,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Wednesday’s low of 7,925.25 and then at 7,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 155 11/32 and then at 155 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at 154 16/32 and then at this week’s low of 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term support lies at the overnight low of 127.16.5 and then at this week’s low of 127.08.5. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 127.24.5 and then at last week’s high of 127.27.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly weaker on a mild pullback after hitting a five-week high Wednesday. Bulls 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. 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 this week’s high of 97.570 and then at the May high of 97.715. Shorter-term support is seen at Tuesday’s low of 96.985 and then at this week’s low of 96.785. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are up in early U.S. trading. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $57.64 and then at $58.00. Look for sell stops just below technical support at this week’s low of $55.33 and then at the July low of $54.85. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were mixed to weaker in overnight trading. Corn was down just over 1 cent, soybeans up just over a penny, and wheat around 2 to 5 cents lower.
Traders are awaiting Thursday morning’s weekly USDA export sales report, especially to see if China has made any purchases of U.S. ag products, as it has said it would. Recent anemic demand for U.S. grains has kept the bulls squelched.
The weather in the U.S. Corn Belt has been cooler and drier and that is presently bearish for the grains. However, traders are starting to focus on extended Midwest weather forecasts that are calling for dry conditions and with increasing temperatures heading into August. This year’s delayed planting of both U.S. corn and soybeans means the month of August will be extra critical for the maturity of both crops.
The Wheat Quality Council spring wheat tour scouts are sampling fields in North Dakota, Minnesota and South Dakota. The tour on Wednesday estimated yields for hard red spring wheat in North Dakota at 40.6 bushels per acre. The figure is below last year’s 41.3 bushels per acre, and the five-year 43.9 bushel average. The three-day tour concludes Thursday.
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