Friday, August 31–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to lower overnight, on renewed trade tensions among the U.S. and other major world economies. U.S. stock indexes are also pointed toward weaker openings, on some more mild profit taking after hitting record highs on Wednesday.
Today is the deadline President Trump has set for Canada to come to terms with the U.S. on a trade agreement. Also, Trump said in a Bloomberg interview that the European Union “is almost as bad as China” regarding unfair trade practices with the U.S. The U.S. says it will impose another $200 billion in tariffs on China’s imports as early as next week.
Today is the last trading day of the week and of the month, which makes it an extra important trading day from a technical chart perspective. Also, the calendar turns to September on Saturday, and after the long U.S. holiday weekend traders and investors will come back to work in a more serious mood, after a summertime of fun and family vacations. The months of September and October many times find the marketplace focusing on matters of worry. The next couple of months could well find the marketplace closely examining the secondary currency markets and the beating they have taken against the U.S. dollar this year.
In other overnight news, the Euro zone’s annual consumer inflation rate was reported at 2.0% in August, which is down slightly from July’s rate of 2.1%.
The key outside markets today find the U.S. dollar index near steady. Meantime, Nymex crude oil prices are weaker on some profit taking after hitting a six-week high on Thursday.
U.S. economic data due for release Friday includes the ISM Chicago business survey and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker on more mild profit taking in early U.S. trading. The bulls still have the solid 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 bearish early today. Today, shorter-term technical resistance comes in at this week’s contract high of 2,917.50 and then at 2,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,876.75 and then at 2,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index December futures: Prices are slightly lower in early U.S. trading, on some more mild profit taking after hitting a contract and record high Thursday. Bulls still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the contract high of 7,697.60 and then at 7,725.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 7,628.75 and then at 7,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly up in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has turned choppy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-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 the overnight high of 144 14/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 144 4/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are higher in early U.S. trading. Bulls 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 below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 120.10.0 and then at 120.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.05.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly down in early U.S. trading. The bulls still have the overall near-term technical advantage, but are fading. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-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 this week’s high of 94.795 and then at 95.000. Shorter-term support is seen at this week’s low of 93.930 and then at 93.750. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are lower on profit taking after hitting a six-week high on Thursday. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $70.00 and then at this week’s high of $70.50. Look for sell stops just below technical support at $69.00 and then at this week’s low of $68.21. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were firmer overnight, on more short covering and some optimism on the U.S. trade front. Bears are still in control amid big U.S. soybean and corn crop potential. Those crops will soon begin to be harvested.
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