Tuesday, July 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. It’s a busy week for the marketplace, as corporate earnings, central bank meetings and GDP data from China are due. Big banks’ earnings are due out today, including JP Morgan, Wells Fargo and Citigroup. U.S. traders and investors are keeping a wary eye on the spread of Covid-19 cases in the country, as California on Monday moved to again lock down indoor businesses.
China, the world’s second-largest economy, Tuesday reported its imports of U.S. goods increased 11.3% in June, year on year, after a 13.5% decline in May. Chinese exports to the U.S. rose 1.4% in the period, versus a 1.3% drop in May. China’s imports from the rest of the world were up 2.7% in June, year on year, following a drop of 16.7% in May. China’s overall exports were up 0.5% in June versus a 3.3% drop in May. These latest trade numbers from China were stronger than expected and highlight the rapid economic recovery China has seen from the pandemic lockdowns.
In other overnight news, the Euro zone got another upbeat economic report today when its industrial production report for May came in at up 12.4% from April—a record monthly rise.
The important outside markets today see Nymex crude oil prices weaker and trading around $39.80 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.63% level.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, real earnings, and the consumer price index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in 3,184.00 and then at Monday’s high of 3,226.25. Buy stops likely reside just above those levels. Downside support for active traders today is seen at last week’s low of 3,105.25 and then at 3,062.75. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are slightly higher in early U.S. trading. While bulls remain in firm overall technical control, Monday’s price action scored a bearish “key reversal” down, which is one clue that a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 10,693.00 and then at 10,800.00. On the downside, shorter-term support is seen at 10,500 and then at 10,400.00. 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. 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 technical resistance is seen at the overnight high of 180 11/32 and then at 181 even. Shorter-term support lies at Monday’s low of 178 31/32 and then at 178 19/32. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the solid 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 bearish early today. Shorter-term resistance lies at the overnight high of 139.13.0 and then at 139.20.0. Shorter-term technical support lies at Monday’s low of 139.07.5 and then at 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are higher in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been choppy. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1392 and then at the June high of 1.1447. Shorter-term support is seen at the overnight low of 1.1340 and then at 1.1300. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are weaker in early U.S. trading. Bulls are fading. A gentle price uptrend on the daily chart appears to be rolling over. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $40.72 and then at $41.00. Look for sell stops just below technical support at $39.00 and then at last week’s low of $38.54. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are firmer in early U.S. pre-market trading, as corn and soybean bulls try to stabilize prices that have dropped sharply. The weather market scare in the U.S. Corn Belt has fizzled and there are renewed concerns over U.S.-China trade relations. Grain market bulls are back in their pens at present.
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