Tuesday, September 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. Asian stocks were mostly lower and European stocks were mostly higher overnight as investors and traders around the world have had two days to digest the latest North Korea nuclear bomb test, which is reported to be the biggest bomb yet. The U.S. says North Korea is “begging for war” as this major geopolitical matter is ratcheted up yet another notch. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. U.S. traders are seeing their first day back at work Tuesday, following the Labor Day holiday weekend.
Gold prices are higher and hit a 10-month high overnight, on safe-haven demand amid the North Korea crisis.
In overnight news, the Euro zone Markit purchasing managers’ composite index (PMI) came in at 55.7 in August, which is just below market expectations for a reading of 55.8. A reading above 50.0 suggests growth in the sector. Euro zone retail sales in July were reported down 0.3% from June and up 2.6%, year-on-year.
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.
The key outside markets on Tuesday morning see the U.S. dollar index lower and not far above the recent 15-month low. Meantime, Nymex crude oil futures higher. Prices are still in a four-week-old downtrend on the daily bar chart.
U.S. economic data due for release Monday includes the ISM New York report on business, manufacturers’ shipments and inventories and the employment trends index.
–Jim
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are lower on risk aversion in early U.S. trading. The 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 is above with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,468.75 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 the overnight low of 2,452.00 and then at 2,440.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index December futures: Prices are weaker in early U.S. trading today, on risk aversion. Prices last week hit a record high. 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 6,000.00 and then at the contract and record high of 6,025.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,953.75 and then at 5,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer in early U.S. trading, on safe-haven demand. 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 early today. Shorter-term technical resistance is seen at the overnight high of 155 23/32 and then at 156 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 5/32 and then at 154 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are higher in early U.S. trading, on safe-haven demand. 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 early today. Shorter-term resistance lies at 127.00.0 and then at 127.07.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.24.0 and then at 126.19.0. 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 weaker in early U.S. trading. Bears have the firm 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 neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 92.445 and then at 92.640. Shorter-term support is seen at 91.830 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 higher in early U.S. trading. Bears still have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $48.50 and then at $49.00. Look for sell stops just below technical support at the overnight low of $47.15 and then at $46.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were higher overnight, on short covering. There are some early chart clues that market bottoms are in place (seasonal harvest lows). Traders will examine this morning’s weekly USDA export inspections report.