Quieter Start to Week, Ahead of Federal Reserve Events

Quieter Start to Week, Ahead of Federal Reserve Events

Monday, August 20–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mostly higher overnight. U.S.
stock indexes are pointed toward firmer openings when the
New York day session begins.

The foreign exchange market has stabilized following recent
turmoil that was mainly the fault of a severely depreciated
Turkish lira. The Chinese yuan has climbed today on reports
Chinese economic officials want to stimulate spending on
infrastructure projects. Metals markets are in rally mode
to start the trading week, on optimism coming from China—a
major metals importer.

A highlight of the trading week will be the annual meeting
of world central bankers in Jackson Hole, Wyoming, late
this week. The Fed’s FOMC minutes are also due out
Wednesday afternoon.

The key outside markets today find the U.S. dollar index
higher and not far below last week’s 14-month high.
Meantime, Nymex crude oil prices are near steady and
trading around $66.00 a barrel. Oil prices hit a seven-week
low late last week and are still trending lower.

There is no major U.S. economic data due for release
Monday.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are slightly higher
in early U.S. trading. The bulls 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 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 bullish early today. Today, shorter-term
technical resistance comes in at the August high of 2,863.75
and then at 2,875.00. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at Friday’s low of 2,835.00 and then at 2,817.50.
Sell stops are likely located just below those levels.
Wyckoff’s Intra-day Market Rating: 6.0

September Nasdaq index December futures: Prices are higher
in early trading. 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
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
7,434.50 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 the overnight low of 7,386.00
and then at 7,350.00. 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 firmer 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 bullish
early today. Shorter-term technical resistance is seen at
last week’s high of 145 3/32 and then at 145 16/32. Buy
stops likely reside just above those levels. Shorter-term
support lies at the overnight low of 144 19/32 and then at
last week’s low of 144 even. Sell stops likely reside just
below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

September 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
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
bullish early today. Shorter-term resistance lies at
Friday’s high of 120.16.0 and then at last week’s high of
120.18.0. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
120.09.0 and then at last week’s low of 120.01.0. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early U.S.
trading today. Bulls have the solid overall near-term
technical advantage. The shorter-term moving averages for
the dollar index 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 for the dollar index
are neutral early today. The dollar index finds shorter-term
technical resistance at Friday’s high of 96.560 and then at
last week’s high of 96.865. Shorter-term support is seen at
last week’s low of 95.970 and then at 95.750. Wyckoff’s
Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

September Nymex crude oil prices are near weaker in early
U.S. trading. Bulls have faded and prices are trending
lower. The shorter-term moving averages 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
(RSI and slow stochastics) are neutral to bearish early
today. Look for buy stops to reside just above technical
resistance at Friday’s high of $66.39 and then at $67.00.
Look for sell stops just below technical support at $65.00
and then at last week’s low of $64.43. Wyckoff’s Intra-Day
Market Rating: 4.5

GRAINS

Grain futures prices were mixed overnight. Reports of trade
talks resuming between the U.S. and Russia later this month
are supportive for the grains. Focus this week will be on
the Pro Farmer Midwest Crop Tour of corn and soybeans.

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