World Stock Markets Mixed Thursday, Watching Latest U.S.-China Trade Developments

World Stock Markets Mixed Thursday, Watching Latest U.S.-China Trade Developments

Thursday, August 23–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

U.S. and world stock markets were mixed to firmer
overnight. By some accounts the S&P 500 stock index has now
reached its longest bull run ever.

Despite low-level trade talks presently taking place, the
U.S. and China each levied new tariffs on each other’s
products Thursday—this time to the tune of $16 billion
apiece.

The Australian dollar has dropped today on news the Prime
Minister is stepping down and cabinet members have
resigned.

In other overnight news, the Euro zone’s Markit purchasing
managers index (PMI) came in at 54.4 in August from 54.3 in
July. A reading above 50.0 suggests growth in the sector.

Traders have pretty much digested Wednesday afternoon’s
FOMC minutes, which said the Fed will very likely in
September raise U.S. interest rates for the third time this
year. The U.S. dollar was boosted by the FOMC minutes.

Another highlight of the trading week will be the annual
meeting of world central bankers in Jackson Hole, Wyoming,
that begins late Thursday. Past years’ meetings have
produced important proclamations from world central
bankers. Fed Chairman Powell is slated to speak at the
symposium.

The key outside markets today find the U.S. dollar index
higher on a bounce after selling pressure earlier this
week. Meantime, Nymex crude oil prices are slightly lower
and trading just below $68.00 a barrel.

U.S. economic data due for release today includes the
weekly jobless claims report, the monthly house price
index, the flash services and manufacturing PMIs, new
residential sales, and the Fed’s Kansas City manufacturing
survey.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are near steady and
not far below this week’s seven-month high. The bulls still
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 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 neutral early today. Today,
shorter-term technical resistance comes in at this week’s
high of 2,874.00 and then at the January high of 2,889.00.
Buy stops likely reside just above those levels. Downside
support for active traders today is located at this week’s
low of 2,846.25 and then at 2,830.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.5

September Nasdaq index December futures: Prices are slightly
down in early trading. Bulls still 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 this week’s high of 7,452.25 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
this week’s low of 7,352.00 and then at last week’s low of
7,316.50. Sell stops are likely located just below those
levels. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are near steady 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 neutral
early today. Shorter-term technical resistance is seen at
this week’s high of 145 24/32 and then at 146 even. Buy
stops likely reside just above those levels. Shorter-term
support lies at 145 even and then at this week’s low of 144
19/32. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 5.0

September U.S. T-Notes: Prices are slightly lower in early
U.S. trading. Prices Wednesday hit a 2.5-month high. 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 bearish
early today. Shorter-term resistance lies at this week’s
high of 120.24.0 and then at 120.28.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at 120.14.0 and then at this week’s low of
120.09.0. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early U.S.
trading today. Bulls have the 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
neutral early today. The dollar index finds shorter-term
technical resistance at Tuesday’s high of 95.660 and then at
96.000. Shorter-term support is seen at this week’s low of
94.830 and then at 94.500. Wyckoff’s Intra Day Market
Rating: 6.0

NYMEX CRUDE OIL

October Nymex crude oil prices are near steady in early U.S.
trading. Bulls have regained upside momentum this week. The
shorter-term moving averages are neutral early today as the
4-day is above 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 bullish early today. Look for
buy stops to reside just above technical resistance at this
week’s high of $68.15 and then at $68.86. Look for sell
stops just below technical support at $67.50 and then at
$67.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures prices were steady to weaker overnight. Focus
this week is on the Pro Farmer Midwest Crop Tour of corn and
soybeans. Results of the tour are showing big U.S. crops and
that’s pressuring grains. Also, beneficial rains have fallen
in the U.S. Corn Belt this week.

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