Monday, July 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Covid worries are again prompting risk aversion in Asia, where Shanghai reported a new Covid variant and Macau shut down its casinos and other businesses for one week. U.S. corporate earnings reports are also in focus this week.
The U.S. data point of the week will be Wednesday’s consumer price index report for June, which is seen coming in up 8.5%, year-on-year. In the May report, CPI was up 8.6% annually.
The key outside markets today see Nymex crude oil prices down and trading around $102.50 a barrel, pressured by the Covid concerns in Asia. The U.S. dollar index is solidly up early today. The yield on the 10-year U.S. Treasury note is fetching 3.062%. The 2-year Treasury note is yielding 3.097%, meaning the yield curve is inverted and is suggesting impending U.S. economic recession.
U.S. economic data due for release Monday includes the employment trends index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. However, last Friday’s bullish weekly high close is one technical clue that a market bottom is in place. 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 at last week’s high of 3,922.00 and then at 3,950.00. Support for active traders is seen at 3,832.50 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are lower in early U.S. trading. Last Friday’s bullish weekly high close is one technical clue that a market bottom 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 early today. Shorter-term technical resistance is seen at last week’s high of 12,211.00 and then at 12,500.00. On the downside, shorter-term support is seen at 11,836.50 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are up 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 Friday’s high of 138 29/32 and then at 140 even. Shorter-term support lies at the overnight low of 136 24/32 and then at 136 even. Wyckoff’s Intra-Day Market Rating: 6.0
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 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 Friday’s high of 118.20.0 and then at 119.00.0. Shorter-term technical support lies at the overnight low of 117.18.5 and then at 117.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are lower 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.0250 and then at 1.0300. Shorter-term support is seen at last week’s low of 1.0121 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
Nymex crude oil prices are solidly lower in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at $105.00 and then at $106.00. Look for sell stops just below technical support at $101.00 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were higher overnight, with corn leading the gains, as weather in the U.S. Corn Belt is getting hotter and drier right ahead of the critical pollination phase of the corn crop’s development. Recent solid gains now suggest near-term market bottoms are in place. On tap today is the weekly USDA export inspections report. Weather forecasts for the Corn Belt remain front and center for grain traders.
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