Wednesday, August 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight, on renewed
worries about the U.S. imposing new tariffs on Chinese
imports. Reports said some of President Trump’s advisors
are advising him to sharply ramp up tariffs on China. And
once again, China said it would retaliate if the U.S. set
new tariffs on Chinese goods. U.S. stock indexes are
pointed toward mixed openings when the New York day session
begins.
In focus today is the FOMC meeting of the Federal Reserve
that began Tuesday morning ends Wednesday afternoon with a
statement. No changes in Fed policy are expected at this
meeting, but as usual traders will parse the Fed statement
on clues for futures monetary policy moves and timing.
The Bank of England meets Thursday for its regular monetary
policy gathering. No changes in policy are expected from
the BOE.
In overnight news, the Euro zone July manufacturing
purchasing managers index (PMI) came in at 55.1, which was
right in line with market expectations and compares to the
54.9 reading in June. A number above 50.0 suggests growth
in the sector.
The key “outside markets” today find Nymex crude oil prices
lower and trading just above $68.00 a barrel. The U.S.
dollar index is slightly higher early today.
U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the ADP national
employment report, the U.S. manufacturing PMI, the global
manufacturing PMI, construction spending, the ISM
manufacturing report on business, and the weekly DOE liquid
energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in
early U.S. trading. The bulls 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 Tuesday’s high of 2,827.75
and then at last week’s high of 2,849.50. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at this week’s low of 2,798.25 and
then at last week’s low of 2,792.50. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.0
September Nasdaq index December futures: Prices are slightly
higher in early trading. Bulls have the 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 and 18-day. The 9-day average is even with
the 18-day. Short-term oscillators (RSI, slow stochastics)
are bearish early today. Shorter-term technical resistance
is seen at this week’s high of 7,309.75 and then at
7,350.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at 7,200.00 and
then at this week’s low of 7,166.75. Sell stops are likely
located just below those levels. Wyckoff’s Intra-Day Market
Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S.
trading. 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 bearish
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 this week’s low of 142 12/32 and then at 142
even. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are weaker in early U.S.
trading. 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 bearish 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
last week’s low of 119.08.0 and then at 119.00.0. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early
U.S. trading. Bulls still have the firm overall near-term
technical advantage but trading has turned choppy and
sideways. 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
neutral early today. The dollar index finds shorter-term
technical resistance at 94.700 and then at 95.000. Shorter-
term support is seen at last week’s low of 93.870 and then
at 93.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are lower in early U.S.
trading. The shorter-term moving averages are neutral early
today as the 4-day is above the 9-day. The 9-day is even
with 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 $69.00 and then at $70.00. Look for sell stops just below
technical support at $67.50 and then at $67.00. Wyckoff’s
Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were lower overnight, on corrective
pullbacks following recent good gains that produced bullish
monthly high closes in corn, soybeans and wheat on Tuesday.
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
