Tuesday, August 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight, boosted in part by upbeat corporate earnings reports and upturns in several raw commodity markets. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
Gold prices are slightly lower on mild profit taking from recent good gains. The gold bulls still have the overall near-term technical advantage as prices are in an uptrend on the daily chart.
In overnight news, the Euro zone reported its gross domestic product at up 0.6% in the second quarter from the first, and up 2.1%, year-on-year. The second quarter saw the best GDP performance for the Euro zone since 2011.
The Euro zone manufacturing purchasing managers’ index (PMI) came in at 56.6 in July versus 57.4 in June. A reading of 56.8 was expected for July. A number above 50.0 suggests expansion in the sector.
The July U.K. PMI came in at 55.1 versus 54.2 in June. A reading of 54.9 was expected in July.
Australia’s central bank left its interest rates unchanged at its regular meeting Tuesday.
The important “outside markets” early Tuesday find the U.S. dollar index slightly higher on a tepid corrective bounce from recent strong downside action that saw the index hit a 13-month low Monday. Meantime, Nymex crude oil futures are near steady and trading just above $50.00 a barrel. Oil prices hit a two-month high overnight.
It’s a busy day for U.S. economic data Tuesday, including the weekly Johnson Redbook and Goldman Sachs retail sales reports, personal income and outlays, the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales.
The key report of the week will be Friday’s U.S. jobs report for July from the Labor Department. The non-farm payrolls number of that report is expected to be up 180,000.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are firmer in early U.S. trading and just below last week’s contract and record high. The bulls have the solid overall near-term technical advantage and there are no strong chart clues that a market top is close at hand. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with 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 the contract high of 2,480.50 and then at 2,490.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,466.25 and then at last week’s low of 2,457.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index September futures: Prices are higher in early U.S. trading today. The 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 above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 5,933.50 and then at 5,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 5,870.25 and then at last week’s low of 5,844.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been choppy recently. 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 to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 153 16/32 and then at 154 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 152 21/32 and then at last week’s low of 152 3/32. 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. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 125.29.0 and then at this week’s high of 126.01.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.24.0 and then at 125.20.0. 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 slightly firmer in early U.S. trading on a tepid corrective bounce after prices Monday hit another 13-month low. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at 93.000 and then at Monday’s high of 93.385. Shorter-term support is seen at Monday’s low of 92.635 and then at 92.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
September Nymex crude oil prices are near steady in early U.S. trading and poked to a two-month high overnight. Prices have been trending higher for six weeks. Look for buy stops to reside just above technical resistance at the overnight high of $50.43 and then at $51.00. Look for sell stops just below technical support at $49.50 and then at $49.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures markets were steady to lower overnight. The extended weather forecasts for the U.S. Corn Belt call for moderate temperatures but still not much rain. Traders are reading that as bearish. However, many parts of the Corn Belt are in drought conditions. It’s still too early to call this latest weather market dead. However, soybeans now have more rally potential on any continued hot, dry conditions. The corn market rally may have run out of gas for the near term.