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
