* Latest Market Developments *
There is a bit less risk aversion in the market place Monday, as evidenced by generally firmer stock markets worldwide. Weekend news saw a meeting between Germany, Russia, Ukraine and France, regarding a implementing a cease-fire between Russian-backed separatists and Ukrainian troops. However, news reports said fighting at present is still ongoing. Still, U.S. Treasury yields that are dropping and record-low German bond yields suggest there remains overall heightened risk aversion in the market place.
Traders and investors are awaiting this week’s annual Federal Reserve officials’ meeting in Jackson Hole, Wyoming, that begins on Friday. The confab of world central bankers has in the past yielded important U.S. monetary policy speeches and clues to the direction of monetary policy. Fed Chair Janet Yellen and ECB President Mario Draghi are scheduled to speak in Jackson Hole. Before the Jackson Hole event comes the Federal Reserve’s FOMC minutes on Wednesday afternoon, which as usual will be closely scrutinized.
U.S. economic data due for release Monday is light and includes the NAHB housing market index.
Wyckoff’s Daily Risk Rating: 6.0 (The market place is only somewhat focused on the still-simmering geopolitical matters: the Russia-Ukraine crisis, Iraq and the Gaza strip.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are higher in early trading and hit a three-week high as bulls are making a move back toward the record high scored in July. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 1,975.00 and then at the record high of 1,985.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,950.00 and then at 1,942.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are higher in early trading today and hit a new 14-year high above 4,000.00. Bulls are back in firm technical command. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 4,005.50 and then at 4,025.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,986.50 and then at 3,975.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
Dow futures: Prices are higher in early U.S. trading. Bulls are have good upside near-term technical momentum. Buy stops likely reside just above technical resistance at Friday’s high of 16,740 and then at 16,800. Sell stops likely reside just below technical support at 16,631 and then at 16,600. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today and seeing profit taking from recent gains that saw prices last week hit a contract high. Bulls still have the solid 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 the overnight high of 141 1/32 and then at 141 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 140 16/32 and then at 140 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are lower in early trading on profit taking after hitting a contract high last Friday. Bulls still have the solid 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. 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 the overnight high of 126.21.0 and then at the contract high of 127.01.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.10.0 and then at 126.05.5. 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 slightly higher in early trading. Prices are hovering not far below the recent nine-month high. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 81.675 and then at the August high of 81.775. Shorter-term support is seen at last week’s low of 81.415 and then at the August low of 81.265. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are lower higher in early U.S. trading. Bears have the firm overall near-term technical advantage as prices are in a two-month-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at the overnight high of $95.14 and then at $95.84. Look for sell stops just below technical support at last week’s low of $93.85 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were mixed but mostly firmer in overnight trading, on short covering. Bears remain in full technical command of the grains. Record U.S. corn and soybean crops are in the offing. This week kicks off the annual Pro Farmer annual Midwest crop tour. Results of that tour will be closely monitored this week.
