World Markets Quiet Monday; OPEC Meeting On Deck

Monday, August 7–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer in overnight trading, following the gains posted on Wall Street Friday. Focus early this week is on a two-day OPEC meeting. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

Gold prices are weaker on some follow-through selling pressure from Friday’s losses that came in the wake of an upbeat U.S. jobs report that favored U.S. monetary policy hawks who would rather see another Fed rate hike soon.

The U.S. dollar index rallied following the jobs report and closed at a bullish weekly high close Friday. That is an early technical clue that a market bottom is in place. However, the greenback is a bit weaker on a corrective pullback Monday, and is still in a solid price downtrend on the daily chart.

Nymex crude oil futures are lower in early trading Monday and trading just below $49.00 a barrel. Oil market watchers are awaiting news coming out of this 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.

U.S. economic data due for release is light Monday, and includes the employment trends index and consumer installment credit.

–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 to bullish 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 last week’s low of 2,463.25 and then at 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 slightly higher 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 5,921.50 and then at last week’s high of 5,947.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last week’s low of 5,856.25 and then at 5,850.00. 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 slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage but faded a bit with Friday’s solid losses. 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 154 7/32 and then at 154 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 28/32 and then at 153 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been choppy. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term resistance lies at the overnight high of 126.04.0 and then at 126.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 125.29.0 and then at 125.24.0. 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, but did see good gains Friday, including a bullish weekly high close that is a very early clue that a market bottom is in place. Bears do still 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. 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 Friday’s high of 93.640 and then at 94.000. Shorter-term support is seen at 93.000 and then at Friday’s low of 92.580. 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 the overnight high of $49.73 and then at $50.00. Look for sell stops just below technical support at last 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 more short covering following recent selling pressure. This summer’s weather has played. Grain market traders are now focused on world supply and demand fundamentals, which favor the bears.