Wednesday, September 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock
indexes are also pointed toward lower openings when the New
York day session begins. Global trade worries and the
potential drag on the major economies of the world are
weighing on equities this week. The U.S. and Canada are
deadlocked on trade negotiations, while there are concerns
the U.S. will slap more trade sanctions on China. Asian
stock markets were also pressured today by weak economic
data coming out of China.
Secondary currency markets, including the Argentine peso
and Turkish lira, remain under pressure against the U.S.
dollar. There are still worries this matter could turn into
something more serious that impacts the global financial
system.
In overnight news, the Euro zone composite purchasing
managers index (PMI) came in at 54.4 in August versus 54.2
in July. The August reading was right in line with market
expectations. A number above 50.0 suggests growth in the
sector.
The key outside markets today find the U.S. dollar index
slightly higher. Meantime, Nymex crude oil prices are lower
on a corrective pullback after hitting a 3.5-month high on
Tuesday. Also, the storm in the Gulf of Mexico did not
reach hurricane status, as some initially reckoned it
would.
U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the weekly Johnson
Redbook and Goldman Sachs retail sales reports, the
international trade in goods and services report, and the
ISM New York report on business.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are weaker on mild
profit taking after hitting a record high last week. 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
still 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 Tuesday’s high of 2,916.75 and then at the contract
high of 2,921.75. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at the overnight low of 2,889.50 and then at 2,875.00. Sell
stops are likely located just below those levels. Wyckoff’s
Intra-day Market Rating: 4.5
December Nasdaq index December futures: Prices are weaker in
early U.S. trading, but still not far below last week’s
contract and record high. 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 bearish early today. Shorter-term technical
resistance is seen at the contract high of 7,723.50 and then
at 7,750.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 7,623.50 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 firmer in early U.S.
trading, on a corrective bounce from Tuesday’s selling
pressure. Bulls still have the overall near-term technical
advantage but are fading and need to show fresh power soon
to keep their chart edge. 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 bearish early today. Shorter-term technical
resistance is seen at the overnight high of 143 15/32 and
then at 144 even. Buy stops likely reside just above those
levels. Shorter-term support lies at Tuesday’s low of 143
2/32 and then at 142 24/32. Sell stops likely reside just
below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer in early U.S.
trading. Bulls still 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
early today. Shorter-term resistance lies at the overnight
high of 120.02.5 and then at Tuesday’s high of 120.09.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at last week’s low of 119.27.5
and then at 119.20.0. Sell stops likely reside just below
those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is near steady in early U.S.
trading. The bulls 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
neutral to bullish early today. The dollar index finds
shorter-term technical resistance at Tuesday’s high of
95.280 and then at 95.500. Shorter-term support is seen at
Tuesday’s low of 94.695 and then at 94.500. Wyckoff’s Intra
Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are lower on profit taking
after hitting a 3.5-month high on Tuesday. The bulls appear
to be exhausted now. The shorter-term moving averages are
still 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
bearish early today. Look for buy stops to reside just above
technical resistance at the overnight high of $69.57 and
then at $70.00. Look for sell stops just below technical
support at the overnight low of $68.67 and then at $68.00.
Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mixed overnight. Worries on the
U.S.-world trade front continue to pressure the grains.
However, very wet weather in parts of the Corn Belt at
present is prompting ideas of harvest delays. Corn and
soybean bears are still in control amid big U.S. crop
potential. Wheat is being pulled down by corn and soybeans,
despite some global production shortfalls.
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
