Thursday, August 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
U.S. and world stock markets were mixed to firmer overnight. By some accounts the S&P 500 stock index has now reached its longest bull run ever.
Despite low-level trade talks presently taking place, the U.S. and China each levied new tariffs on each other’s products Thursday—this time to the tune of $16 billion apiece.
The Australian dollar has dropped today on news the Prime Minister is stepping down and cabinet members have resigned.
In other overnight news, the Euro zone’s Markit purchasing managers index (PMI) came in at 54.4 in August from 54.3 in July. A reading above 50.0 suggests growth in the sector.
Traders have pretty much digested Wednesday afternoon’s FOMC minutes, which said the Fed will very likely in September raise U.S. interest rates for the third time this year. The U.S. dollar was boosted by the FOMC minutes.
Another highlight of the trading week will be the annual meeting of world central bankers in Jackson Hole, Wyoming, that begins late Thursday. Past years’ meetings have produced important proclamations from world central bankers. Fed Chairman Powell is slated to speak at the symposium.
The key outside markets today find the U.S. dollar index higher on a bounce after selling pressure earlier this week. Meantime, Nymex crude oil prices are slightly lower and trading just below $68.00 a barrel.
U.S. economic data due for release today includes the weekly jobless claims report, the monthly house price index, the flash services and manufacturing PMIs, new residential sales, and the Fed’s Kansas City manufacturing survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady and not far below this week’s seven-month high. The bulls still have the firm overall near-term technical advantage amid an uptrend in place on the daily bar chart. 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 neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 2,874.00 and then at the January 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 2,846.25 and then at 2,830.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are slightly down in early trading. Bulls still 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 this week’s high of 7,452.25 and then at last week’s high of 7,479.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,352.00 and then at last week’s low of 7,316.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Bulls have the overall near-term technical advantage amid a fledgling uptrend in place on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 this week’s high of 145 24/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at 145 even and then at this week’s low of 144 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Prices Wednesday hit a 2.5-month high. Bulls have the 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 and 18-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 120.24.0 and then at 120.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.14.0 and then at this week’s low of 120.09.0. 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 higher in early U.S. trading today. Bulls have the 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 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 Tuesday’s high of 95.660 and then at 96.000. Shorter-term support is seen at this week’s low of 94.830 and then at 94.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
October Nymex crude oil prices are near steady in early U.S. trading. Bulls have regained upside momentum this week. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $68.15 and then at $68.86. Look for sell stops just below technical support at $67.50 and then at $67.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were steady to weaker overnight. Focus this week is on the Pro Farmer Midwest Crop Tour of corn and soybeans. Results of the tour are showing big U.S. crops and that’s pressuring grains. Also, beneficial rains have fallen in the U.S. Corn Belt this week.
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