Wednesday, August 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. However, technology shares worldwide were supported by upbeat earnings released Tuesday afternoon from technology leader Apple. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Gold prices are moderately lower in pre-U.S.-session trading today. The market is seeing some profit taking from recent gains and is pressured a bit as the U.S. dollar has stabilized at mid-week, after its recent sell off.
In overnight news, India’s central bank lowered its key interest rate by 0.25%, to 6.0%. The move was not unexpected.
The Euro zone producer price index was reported down 0.1% in June from May, and was up 2.5%, year-on-year. Those numbers were in line with market expectations.
The important “outside markets” early Wednesday find the U.S. dollar index slightly lower. The index is trying to stabilize at mid-week after hitting a 13-month low Monday. Meantime, Nymex crude oil futures are near steady and trading just above $49.00 a barrel. Oil prices hit a two-month high Tuesday and remain in an uptrend on the daily chart.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the ISM New York report on business and the weekly DOE liquid energy stocks report.
The big U.S. data point of the week is the monthly employment situation report released by the Labor Department on Friday morning. The key non-farm payrolls component of that report is forecast to show a rise of 180,000 workers.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly up in early U.S. trading and just below last week’s contract and record high. The bulls have the solid overall near-term technical advantage and there are no strong chart clues that a market top is close at hand. 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 bearish 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 this week’s low of 2,465.25 and then at last week’s low of 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 solidly 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 above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 5,947.50 and then at 5,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,900.00 and then at this week’s low of 5,870.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been choppy recently. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 153 30/32 and then at this week’s high of 154 3/32. Buy stops likely reside just above those levels. Shorter-term support lies at 153 10/32 and then at 153 even. 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 turned choppy. 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 bearish early today. Shorter-term resistance lies at this week’s high of 126.08.0 and then at 126.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.00.0 and then at 125.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading. Prices Monday hit a 13-month low. 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. 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 93.000 and then at this week’s high of 93.385. Shorter-term support is seen at this week’s low of 92.635 and then at 92.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady in early U.S. trading. Prices have been trending higher for six weeks. Look for buy stops to reside just above technical resistance at $50.00 and then at this week’s high of $50.43. Look for sell stops just below technical support at this week’s low of $48.37 and then at $48.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were firmer overnight on a short covering and technical bounce following recent strong selling pressure. The weather market that had played out over the past few weeks has now fizzled out. That’s bearish. The damage that has occurred to the crops over the past few weeks has now been factored into grain prices. Bulls need some fresh, positive news to fuel more upside price action.