Tuesday, August 27–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward near-steady openings when the New York day session begins. While there is still a bit more trader and investor optimism regarding a U.S.-China trade agreement being reached down the road, it appears President Trump’s comments Monday at the G-7 meeting in France were probably too optimistic, following rhetoric coming out of China.
While traders and investors are may not quite as anxious so far this trading week, there are still elements lingering that could quickly induce a headache for the world marketplace, including civil unrest in Hong Kong, and instability in the Persian Gulf and in Venezuela. The months of September and October are right around the corner, which have been problematic for the stock market in the past. And this year the U.K. is scheduled to leave the European Union (Brexit) in October—so far without a planned departure.
In overnight news, another report showed weakening world economic growth, as Germany’s second-quarter gross domestic product was down 0.1%. Germany auctioned is two-year note for a yield of minus 0.89% today, which is a record low.
The key “outside markets” today see Nymex crude oil prices up and trading around $54.25 a barrel. The U.S. dollar index is weaker.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the quarterly and monthly house price indexes, the S&P-Core-Logic house price index, the Richmond Fed business survey, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,900.00 and then at 2,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,870.25 and then at 2,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
December Nasdaq index futures: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 7,641.75 and then at 7,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,565.00 and then at 7,500.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
December U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 165 12/32 and then at 166 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 13/32 and then at 164 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 support lies at the overnight low of 131.16.5 and then at 131.10.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 132.00.0 and then at the contract high of 132.09.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower in early U.S. trading. Bulls still 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 below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 97.579 and then at last week’s high of 97.950. Shorter-term support is seen at 97.250 and then at last week’s low of 96.960. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are firmer in early U.S. trading. Bears have the slight overall near-term technical advantage amid a six-week-old price downtrend still in place on the daily bar chart. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $55.00 and then at $55.60. Look for sell stops just below technical support at the overnight low of $53.71 and then at this week’s low of $52.96. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures prices were steady to weaker in overnight trading. Corn was near steady, soybeans down around 7 cents and wheat off about 1 cent. As many grain traders suspected, it appears President Trump’s comments Monday at the G-7 meeting in France were probably too optimistic, following rhetoric coming out of China.
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