Friday, July 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session beings. It’s a busy U.S. data day to end the trading week, highlighted by the retail sales report for June. Sales are forecast up 0.9% compared to the May report that was down 0.3%.
Other U.S. economic data due for release Friday includes the Empire State manufacturing survey, import and export prices, industrial production and capacity utilization, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.
In overnight news, China, the world’s second-largest economy, reported its GDP cooled sharply in the second quarter due to Covid lockdowns. China’s GDP was up just 0.4%, year-on-year. That was below market expectations and the lowest since the first quarter of 2020, when the pandemic began.
The commodity markets have sent two strong, early signals to the marketplace the past couple weeks that traders and investors need to heed. Crude oil, gold, copper, silver, the grains, coffee, cotton and other markets have posted very sharp losses. Those two signals are one, that price inflation overall has very likely peaked, and two, that the U.S. and other major economies are on the verge of recession, if not already there. The smart money in the marketplace will not be making trades counter to those two strong signals.
The key outside markets today see Nymex crude oil prices higher and trading around $97.00 a barrel. The U.S. dollar index is weaker in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.93%.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher 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 neutral early today. The 4-day moving average is below the 9-day and 18-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 3,850.00 and then at 3,873.00. Support for active traders is seen at this week’s low of 3,723.75 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 12,000.00 and then at the July high of 12,211.00. On the downside, shorter-term support is seen at this week’s low of 11,479.25 and then at the July low of 11,381.75. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 140 14/32 and then at 141 even. Shorter-term support lies at 139 even and then at 138 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 119.00.0 and then at this week’s high of 119.06.0. Shorter-term technical support lies at 118.00.0 and then at this week’s low of 117.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly up in early U.S. trading. Bears have the strong overall near-term technical advantage. 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.0172 and then at 1.0200. Shorter-term support is seen at this week’s low of 1.0000 and then at .9950. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading, on short covering after hitting a three-month low Thursday. Bears have the near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $100.00 and then at $102.00. Look for sell stops just below technical support at $95.00 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed to slightly up overnight. Bears are in firm near-term technical control. Attention remains on weather forecasts for the Corn Belt, which are now for mostly warmer and drier conditions the next two weeks. Today’s trading will be important, as traders may add some weather premium back into futures prices, as the Corn Belt forecast tilts in favor of the bulls.
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