Friday, July 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on this first trading day of the month and of the second half of 2022. Potential U.S. and/or global economic recessions are on the front burner of the marketplace at present, and that’s bearish for equities. The major central banks have signaled to the marketplace that tamping down inflation is more important than keeping economies growing. “We can see the foundations are being set for recession,” said one market participant in a Dow Jones Newswires story. The Russia-Ukraine war also remains a significant drag on trader and investor risk sentiment.
In overnight news, the Euro zone reported its consumer inflation in June rose to a record high of 8.6%, year-on-year. That compares to a rise of 8.1% in May and expectations for a June rise of 8.4%on the year.
The key outside markets today see Nymex crude oil prices higher and trading around $108.00 a barrel. The U.S. dollar index is higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.954%.
U.S. economic data due for release Friday includes the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, the global manufacturing PMI, construction spending and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 3,840.00 and then at 3,900.00. Support for active traders is seen at this week’s low of 3,741.25 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are a bit lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 11,749.00 and then at 12,000.00. On the downside, shorter-term support is seen at this week’s low of 11,351.00 and then at the June low of 11,068.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady in early U.S. trading but hit a four-week high overnight. Bears are in overall near-term technical control, but bulls are working on a fledgling price uptrend on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at 139 even and then at 140 even. Shorter-term support lies at the overnight low of 137 26/32 and then at 137 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher and hit a four-week high in early U.S. trading. Bears are in overall near-term technical control but bulls are working on a price uptrend on the daily chart. 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 bullish early today. Shorter-term resistance lies at 119.00.0 and then at 119.10.0. Shorter-term technical support lies at the overnight low of 118.06.0 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage as prices are not far above the recent lows. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Thursday’s high of 1.0546 and then at 1.0600. Shorter-term support is seen at May low of 1.0425 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher 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 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 $110.00 and then at $112.00. Look for sell stops just below technical support at the overnight low of $104.56 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were mixed to firmer in early U.S. pre-market trading. Short covering from recent losses was featured overnight. It will likely be a quieter, pre-holiday trading day in the grains Friday. However, next Tuesday (the July 4 holiday is Monday) is historically a very important trading day in the grain futures markets. Existing price trends can be accelerated or reversed as weather patterns in early July can make dramatic shifts.
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
