World Stock Markets Steady-Weaker Following Downbeat Data from China, Germany

Tuesday, August 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mixed to weaker overnight. There was some downbeat economic data coming out of Germany and China. China’s imports were up 11% in July versus up 17% in June. China’s exports were up 7.2% versus up 11.3% in June. Germany’s trade surplus grew in June, but its imports and exports declined. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

Gold prices are firmer today on a bounce from recent profit-taking pressure, most of which was profit-taking from the shorter-term futures traders.

North Korea has threatened to use its nuclear weapons against the U.S. after the United Nations slapped more sanctions on the rogue nation. This news could also be prompting a bit of safe-haven demand for gold. This matter won’t just go away and will likely get worse before it gets better.

The U.S. dollar index is weaker in early U.S. trading Tuesday. The index has been trending lower all year long and the bears possess the strong near-term technical advantage.

Meantime, Nymex crude oil futures are slightly up and trading just below $50.00 a barrel. Reports overnight said OPEC leader Saudi Arabia is planning to reduce its oil exports to Asia. OPEC members are meeting this week in Abu Dhabi.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, and the IDB/TIPP economic optimism index.

–Jim

U.S. STOCK INDEXES

S&P 500 September e-mini futures: Prices are slightly lower in early U.S. trading and just below the recent contract and record high. The bulls have the solid overall near-term technical advantage but trading has been sideways at higher levels for two weeks. 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 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 last week’s low of 2,463.25 and then at 2,457.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index September futures: Prices are slightly lower 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 even with 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 last week’s 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 Monday’s low of 5,898.00 and then at last week’s low of 5,856.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage amid recent choppy trading. 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 154 15/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 153 28/32 and then at 153 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been choppy. Shorter-term moving averages (4- 9- 18-day) are still 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 resistance lies at Monday’s high of 126.07.0 and then at 126.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 125.30.0 and then at 125.24.0. 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 slightly lower in early U.S. trading. Bears 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 above the 9-day. The 9-day is below 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 93.295 and then at 93.500. Shorter-term support is seen at 93.000 and then at 92.580. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

September Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. Prices have been trending higher for six weeks. Look for buy stops to reside just above technical resistance at the overnight high of $49.79 and then at $50.00. Look for sell stops just below technical support at $49.00 and then at last week’s low of $48.37. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures markets were firmer overnight, on more short covering and bargain hunting following recent selling pressure. Grain market traders are now focused on world supply and demand fundamentals, which still favor the bears.