Thursday, September 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were narrowly mixed overnight. U.S. stock indexes are also pointed mixed openings when the New York day session begins.
Gold prices are firmer in pre-U.S.-day-session trading. The gold bulls remain in firm technical control, to suggest more sideways-to-higher price action in the near term.
The major economic data point of the week is Thursday’s European Central Bank monetary policy meeting, including a press conference from ECB President Mario Draghi after the meeting. Traders and investors are wondering if the ECB will announce a scaling back of its years-long bond-buying program, called quantitative easing. However, most do not expect the ECB to make any monetary policy changes at this meeting. However, Draghi could provide clues on the matter at his press conference. The Euro currency could become volatile in FOREX trading, in the wake of the ECB meeting and Draghi’s press conference.
In overnight news, the Euro zone revised second-quarter gross domestic product report showed a 0.6% rise from the first quarter and was up 2.3%, year-on-year. The annual number was the highest growth rate for the Euro zone since the first quarter of 2011.
China’s central bank on Thursday fixed the country’s currency, the yuan, at its highest level against the U.S. dollar in 16 months, reports said.
Malaysia’s central bank left its monetary policy unchanged Thursday, as expected.
The key outside markets on Thursday morning see the U.S. dollar index lower and not far above the recent 15-month low. Meantime, Nymex crude oil futures are also weaker.
U.S. economic data due for release Thursday includes the weekly jobless claims report, revised productivity and costs, the IBD/TIPP economic optimism index, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are near steady in early U.S. trading. The 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 is above with 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 this week’s high of 2,469.50 and then at last week’s high of 2,477.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2,454.75 and then at this week’s low of 2,443.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index December futures: Prices are slightly firmer in early U.S. trading today. 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 with 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 5,991.50 and then at 6,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,940.00 and then at 5,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Prices Wednesday hit a contract high. Bulls have the solid overall near-term technical advantage amid a price 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 157 even and then at the contract high of 157 12/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 11/32 and then at 156 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Prices Wednesday hit a contract high. Bulls have the solid overall near-term technical advantage amid a price 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the contract high of 127.18.0 and then at 127.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 127.03.0 and then at 127.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower in early U.S. trading. 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 92.000 and then at this week’s high of 92.445. Shorter-term support is seen at 91.500 and then at the contract low of 91.350. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly lower in early U.S. trading. Bulls and bears are now on a level overall near-term technical playing field. Look for buy stops to reside just above technical resistance at this week’s high of $49.42 and then at $50.00. Look for sell stops just below technical support at Wednesday’s low of $48.52 and then at $48.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were mixed overnight. There are early chart clues that market bottoms are in place (seasonal harvest lows) for corn and beans. And if corn and beans have put in market bottoms, it’s likely wheat has, too. U.S. corn harvest is just getting under way in some southern Corn Belt areas.