* Latest Market Developments *
On the geopolitical front, the market place perceives the Russia-Ukraine tensions might be easing just a bit following conciliatory words from Russian president Putin late this week. Also, reports said a Russian convoy of non-military goods has passed, or is ready to pass, into Ukraine. If the convoy is allowed to pass into Ukraine it would be considered a further de-escalation of the crisis. However, if there is a confrontation at the border of Russia and Ukraine, regarding the convoy, it could quickly escalate the tensions. There has been no escalation of violence on the Gaza strip or in Iraq this week, which has allowed the market place to put the above matters on the back burner, for now. However, I suspect that early September could see renewed concerns regarding geopolitics, which would be bullish for the safe-haven assets like U.S. Treasuries, the U.S. dollar and gold.
The market place is looking ahead to next week’s annual Federal Reserve officials’ meeting in Jackson Hole, Wyoming. That confab has in the past yielded important U.S. monetary policy speeches and clues to the direction of monetary policy. Fed Chair Janet Yellen is scheduled to speak in Jackson Hole next week.
U.S. economic data due for release Friday is significant and includes the producer price index, the Empire State manufacturing survey, Treasury international capital data, industrial production and capacity utilization, and the University of Michigan consumer sentiment survey.
Wyckoff’s Daily Risk Rating: 6.0 (The market place this week was less 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 slightly higher again in early trading as bulls are making a solid recovery from recent selling pressure. Prices are not that far below last month’s record high. 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 1,965.00 and then at 1,975.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,950.00 and then at Thursday’s low of 1,942.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are higher in early trading today as bulls have made a strong recovery from recent selling pressure and are again challenging last month’s 14-year high. 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 July high of 3,991.00 and then at 4,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,971.25 and then at 3,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
Dow futures: Prices are higher in early U.S. trading. Bulls are have regained good upside near-term technical momentum. Buy stops likely reside just above technical resistance at 16,754 and then at 16,800. Sell stops likely reside just below technical support at 16,700 and then at 16,682. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer early today and hovering near this week’s contract high. Bulls 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 bullish early today. Shorter-term resistance lies at the contract high of 140 11/32 and then at 140 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 139 29/32 and then at 139 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 September U.S. T-Notes: Prices are slightly higher in early trading and hovering near the contract high. Bulls 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 bullish early today. Shorter-term resistance lies at this week’s high of 126.14.0 and then at the contract high of 126.17.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.05.5 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker in early trading. Prices are still hovering near a nine-month high. Bulls have the firm overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.675 and then at last week’s high of 81.775. Shorter-term support is seen at this week’s low of 81.415 and then at the August low of 81.265. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly higher in early U.S. trading as the market pauses after hitting a five-month low on Thursday. Bears have the firm overall near-term technical advantage as prices are in a seven-week-old downtrend on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at $96.00 and then at $96.55. Look for sell stops just below technical support at this week’s low of $95.26 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mixed but mostly weaker in overnight trading. Not much new. Bears remain in full technical command of the grains. Record U.S. corn and soybean crops are in the offing. Now, focus of traders will now be on harvesting those crops and on worldwide demand. I suspect the seasonal “harvest lows” in the grains will make an early visit this year.
