Thursday, August 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Traders and investors worldwide remain generally upbeat and risk-averse.
Traders are awaiting this morning’s U.S. jobs report for July. Wednesday’s ADP national employment report for July showed a rise of 219,000. That number was higher than the expected rise of 185,000. The non-farm payrolls number today is forecast to come in at up 190,000. The stronger ADP number suggests today’s figure could come in higher, too. Look for more active trading in the immediate aftermath of the jobs report. However, it’s also prime vacation season in the U.S. and Europe. Trading could well continue to be generally lackluster until after the U.S. Labor Day holiday.
In overnight news, the Euro zone services purchasing managers index (PMI) came in at 54.2 in July, which was just below market expectations. A reading above 50.0 suggests growth in the sector.
The Chinese currency, the yuan, fell to a 14-month low against the U.S. dollar today. While the depreciating yuan helps out China’s trade surplus, it also risks domestic capital outflows from the country.
The key “outside markets” today find Nymex crude oil prices slightly lower and trading just below $69.00 a barrel. The U.S. dollar index is slightly higher early today and is near its 12-month high scored a few weeks ago.
Other U.S. economic data due for release Friday includes international trade in goods and services, the U.S. services PMI, the global services PMI and the ISM non-manufacturing report on business.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. The bulls have the firm overall near-term technical advantage. 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 July high of 2,849.50 and then at 2,870.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,800.00 and then at this week’s low of 2,791.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index December futures: Prices are slightly higher in early trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 7,425.00 and then at 7,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,350.00 and then at 7,300.00. 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 firmer in early U.S. trading, on more short covering after hitting a nine-week low Wednesday. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 143 even and then at this week’s high of 143 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 9/32 and then at this week’s low of 141 27/32. 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, on more short covering after hitting a six-week low on Wednesday. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 119.21.0 and then at 119.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.02.5 and then at 119.00.0. 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 higher and hit another two-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the July high of 95.440 and then at 95.750. Shorter-term support is seen at Thursday’s low of 94.420 and then at last week’s low of 93.870. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is above the 9-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 Thursday’s high of $69.36 and then at $70.00. Look for sell stops just below technical support at $68.00 and then at $67.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. U.S.-China trade worries are pressuring soybeans, but corn and wheat are supported on good world supply-and-demand fundamentals. The next big report for the grains is the August 10 monthly supply-and-demand report. Weather in the Corn Belt is still mostly benign. No serious weather markets have occurred this summer and the clock is ticking for such to occur.
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