Monday, August 14–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly higher Monday, on some easing of fears the U.S. and North Korea are headed toward military conflict soon. The U.S. secretary of defense and secretary of state, as well as other Trump administration officials, on Sunday said they are trying to achieve denuclearization of North Korea through diplomacy. Also, China on Monday said it has banned key North Korean imports.
Gold prices are weaker on some profit-taking from shorter-term futures traders and on a corrective pullback from recent gains. A slightly less risk-averse marketplace on Monday is also a negative for safe-haven gold.
In other overnight news, the Euro zone reported its industrial output was down 0.6% in June from May, and up 2.6%, year-on-year. These numbers were below expectations and fall into the camp of the monetary policy doves, who do not want to see the European Central Bank start to tighten its monetary policy.
Japan’s gross domestic product growth came in at a strong 4.0% in the second quarter.
The U.S. dollar index is higher in early U.S. trading Monday. Trading has been choppy in the greenback the past week. Meantime, Nymex crude oil futures are modestly lower in early U.S. trading. Crude oil trading has also been choppy and sideways the past week. Stiff overhead resistance at the $50.00 level is keeping the bulls in check, at present.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are higher in early U.S. trading, on a bounce from last week’s selling pressure that produced a bearish “key reversal” down on the daily bar chart, which is a chart clue that a market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below 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 2,465.00 and then at 2,475.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,441.50 and then at last week’s low of 2,430.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index September futures: Prices are higher in early U.S. trading today, on a corrective bounce from last week’s selling pressure. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 5,880.00 and then at 5,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,837.25 and then at 5,800.00. 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 lower in early U.S. trading, on a corrective pullback from recent gains. Bulls still have the firm 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 155 16/32 and then at last week’s high of 155 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 154 23/32 and then at 154 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower on profit taking after hitting a six-week high on Friday. Bulls still 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 bearish early today. Shorter-term resistance lies at 126.24.0 and then at last week’s high of 126.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.16.0 and then at 126.10.0. 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 higher in early U.S. trading, on a corrective bounce in a downtrend. Bears still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 93.500 and then at last week’s high of 93.785. Shorter-term support is seen at last week’s low of 92.830 and then at the August low of 92.390. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded a bit recently. Prices have been trending sideways for two weeks. Look for buy stops to reside just above technical resistance at $49.00 and then at $50.00. Look for sell stops just below technical support at last week’s low of $47.98 and then at $47.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were lower overnight. Last Thursday’s monthly USDA supply and demand report was bearish and has further sunk the grain markets. Grain market bears are in firm technical control.