Tuesday, August 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
The U.S. today brought back harsh economic sanctions on Iran that were lifted by the Obama administration as part of an Iran non-nuclear deal that President Trump cancelled. Trump tweeted today that anyone doing business with Iran will not be doing business with the U.S. Likely rising tensions between the U.S. and Iran could be the next geopolitical flashpoint in the world marketplace, which could boost safe-haven gold and silver prices. Reports say Iran could produce a nuclear bomb within a year.
The key “outside markets” today find Nymex crude oil prices higher and trading just below $70.00 a barrel. The U.S. dollar index is weaker today but still not far below its recent 12-month high. The Turkish lira fell to a new low against the dollar this week, as an example of how the secondary world currencies have been punished by a stronger U.S. dollar.
U.S. economic data due for release Tuesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the IBD/TIPP economic optimism index, and consumer credit.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher and hit a six-month high in early U.S. trading. The bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,875.00 and then at the January contract high of 2,889.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,835.00 and then at 2,820.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are higher in early trading. 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 above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the July high of 7,530.00 and then at 7,550.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 7,387.50 and then at 7,350.00. 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. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 143 18/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 142 28/32 and then at 142 16/32. 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. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Monday’s high of 119.24.0 and then at 119.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 119.17.0 and then at 119.10.0. 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 lower in early U.S. trading, on profit taking. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above 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 the overnight high of 95.225 and then at the July high of 95.440. Shorter-term support is seen at 94.795 and then at 94.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are higher 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 even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $70.00 and then at $70.43. Look for sell stops just below technical support at $69.00 and then at Monday’s low of $68.50. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were higher overnight. Grains are supported on bullish world supply-and-demand fundamentals. The next big report for the grains is Friday’s 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