Monday, August 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight, on this first trading day of August. U.S. stock indexes are pointed toward lower openings when the New York day session beings, on corrective pullbacks and pauses after posting a very good month of July. The U.S. stock indexes are in near-term price uptrends on the daily bar charts amid better trader and investor risk appetite in the marketplace.
In overnight news, China’s official purchasing managers index (PMI) came in at 49.0 in July from 50.2 in June. A reading below 50.0 suggests contraction in the sector. Meantime, the Euro zone July manufacturing PMI was reported at 49.8 versus 52.1 in June.
The key outside markets today see Nymex crude oil prices down and trading around $96.75 a barrel. Traders are awaiting an OPEC meeting Wednesday. The U.S. dollar index is lower in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.681%. The 2-year U.S. Treasury note yield is trading at 2.921%, to keep the yield curve inverted.
U.S. economic data due for release Monday includes the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, and construction spending.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on a corrective pullback after prices hit a seven-week high on Friday and closed at a bullish weekly high close. Bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 4,144.00 and then at 4,200.00. Support for active traders is seen at Friday’s low of 4,081.00 and then at 4,050.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading, on a downside correction after prices hit a nearly three-month high on Friday and closed at a bullish weekly high close. Prices are trending higher on the daily bar chart and bulls have the overall near-term technical advantage. 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 early today. Shorter-term technical resistance is seen at last week’s high of 13,012.00 and then at 13,200.00. On the downside, shorter-term support is seen at last Friday’s low of 12,744.25 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls are keeping alive a six-week-old price uptrend on the daily bar 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 neutral early today. Shorter-term technical resistance is seen at the July high of 144 12/32 and then at 145 even. Shorter-term support lies at the overnight low of 143 even and then at last Friday’s low of 142 10/32. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage amid a six-week-old uptrend in place on the daily bar chart. 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 early today. Shorter-term resistance lies at the July high of 121.12.5 and then at 121.08.0. Shorter-term technical support lies at last Friday’s low of 120.17.0 and then at 120.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are higher in early U.S. trading. Bears have the firm overall near-term technical advantage. 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.0320 and then at 1.0400. Shorter-term support is seen at last week’s low of 1.0134 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bulls and bears are on a level near-term technical playing field. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is below 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 the overnight high of $98.65 and then at $100.00. Look for sell stops just below technical support at the overnight low of $96.13 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower overnight. The first Ukrainian grain shipment out of the Black Sea region has occurred. Also, weather forecasters have added some better rain chances for the U.S. Corn Belt over the next several days. Most U.S. soybeans see the critical growing period during August. On tap today is the weekly USDA export inspections report.
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