Thursday, August 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight, on renewed
worries about the U.S. imposing higher tariffs on Chinese
imports. U.S. stock indexes are pointed toward lower
openings when the New York day session begins.
The White House announced Wednesday that it is considering
increasing from 10%, to 25%, the tariffs on Chinese
imports. The world’s two largest economies going at it on
trade is a keen worry in the global marketplace.
Traders are looking ahead to Friday’s U.S. jobs report for
July. Wednesday’s ADP national employment report for July
showed a rise of 219,000. That number was higher than the
expected rise of 185,000. The non-farm payrolls number on
Friday is forecast to come in at up 190,000. The stronger
ADP number suggests Friday’s figure could come in higher,
too.
Wednesday’s FOMC meeting of the Federal Reserve saw no
changes in Fed policy. However, the marketplace deemed the
FOMC statement as being slightly hawkish on U.S. monetary
policy.
The Bank of England is meeting today for its regular
monetary policy gathering. No changes in policy are
expected from the BOE.
In other overnight news, the Euro zone producer price index
for July was up 0.4% from June and up 3.6%, year-on-year.
That inflation data from the Euro zone is “running hot.”
The World Gold Council has reported that gold demand in
India will be better in the second half of this year, due
to good crop harvests and the festival seasons. India and
China run neck-and-neck as the leading gold consumer in the
world.
The key “outside markets” today find Nymex crude oil prices
lower and trading just above $67.00 a barrel. The U.S.
dollar index is higher early today.
U.S. economic data due for release Thursday includes the
weekly jobless claims report, the Challenger job-cuts
report, the ISM New York report on business, and
manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower and hit a
two-week low in early U.S. trading. The bulls still have the
firm overall near-term technical advantage. The 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 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 the overnight
high of 2,815.00 and then at this week’s high of 2,827.75.
Buy stops likely reside just above those levels. Downside
support for active traders today is located at 2,770.00 and
then at 2,750.00. Sell stops are likely located just below
those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index December futures: Prices are lower in
early trading. Bulls still have the overall near-term
technical advantage. Shorter-term moving averages (4- 9-and
18-day) are bearish early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day average is below the
18-day. Short-term oscillators (RSI, slow stochastics) are
bearish early today. Shorter-term technical resistance is
seen at 7,260.00 and then at this week’s high of 7,309.75.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at this week’s low of
7,166.75 and then at 7,150.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-Day Market Rating:
4.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer in early U.S.
trading, on short covering after hitting a nine-week low on
Wednesday. Bears have the overall near-term technical
advantage. Shorter-term moving averages (4- 9- 18-day) are
bearish early today. The 4-day moving average is below the
9-day and 18-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are neutral to
bullish early today. Shorter-term technical resistance is
seen at 143 even and then at this week’s high of 143 16/32.
Buy stops likely reside just above those levels. Shorter-
term support lies at the overnight low of 142 2/32 and then
at this week’s low of 141 27/32. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
5.5
September U.S. T-Notes: Prices are firmer in early U.S.
trading, on short covering after hitting a six-week low on
Wednesday. Bears have the overall near-term technical
advantage. Shorter-term moving averages (4- 9- 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.
Oscillators (RSI, slow stochastics) are neutral early
today. Shorter-term resistance lies at this week’s high of
119.21.0 and then at 119.25.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
this week’s low of 119.02.5 and then at 119.00.0. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit a two-week
high in early U.S. trading. Bulls 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 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 bullish early today. The dollar index finds
shorter-term technical resistance at 95.000 and then at the
July high of 95.440. Shorter-term support is seen at the
overnight low of 94.420 and then at last week’s low of
93.870. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
September Nymex crude oil prices are lower and hit a two-
week low in early U.S. trading. The shorter-term moving
averages are bearish early today as the 4-day is below the
9-day. The 9-day is below the 18-day moving average. Short-
term oscillators (RSI and slow stochastics) are bearish
early today. Look for buy stops to reside just above
technical resistance at the overnight high of $68.15 and
then at $69.00. Look for sell stops just below technical
support at $67.00 and then at $66.00. Wyckoff’s Intra-Day
Market Rating: 4.0
GRAINS
Grain futures prices were mixed to higher overnight. U.S.-
China trade worries are pressuring soybeans, but corn and
wheat are higher on good world supply-and-demand
fundamentals. Traders will closely examine this morning’s
weekly USDA export sales report. The next big report for the
grains is the August 10 monthly supply-and-demand report.
Weather in the Corn Belt is still mostly benign, but warmer
temps are expected in early August. Still, no serious
weather markets have occurred this summer.
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
