Tuesday, July 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session beings. Corporate earnings reports are on the front burner of the stock markets early this week. Otherwise, its summertime doldrums trading amid a lack of major, fresh news early this week.
In overnight news, the Euro zone consumer price index report for June came in at up 8.6%, year on year, which was right in line with market expectations.
Traders and investors are looking ahead to Thursday when the European Central Bank holds its regular monetary policy meeting. The ECB is expected to raise interest rates for the first time in 11 years, with many market watchers looking for a 0.5% rate increase. The U.S. Federal Reserve is expected to raise its key interest rate by at least 0.75% at next week’s FOMC meeting.
The key outside markets today see Nymex crude oil prices weaker and trading around $102.00 a barrel. The U.S. dollar index is solidly lower again in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.995%.
U.S. economic data due for release Tuesday and includes new residential construction and the weekly Johnson-Redbook and chain store retail sales reports.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bears still have the overall near-term technical advantage. However, trading has been sideways and choppy recently, suggesting a market bottom is in place. 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 bullish early today. Today, shorter-term technical resistance comes in at the July high of 3,922.00 and then at 3,950.00. Support for active traders is seen at 3,800.00 and then at the July low of 3,723.75. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are 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 even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the July high of 12,211.00 and then at 12,500.00. On the downside, shorter-term support is seen at 11,740.25 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in slight overall near-term technical control. 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 140 even and then at last week’s high of 140 21/32. Shorter-term support lies at Monday’s low of 138 12/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower 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 to bearish early today. Shorter-term resistance lies at the overnight high of 118.15.5 and then at Monday’s high of 118.29.5. Shorter-term technical support lies at Monday’s low of 118.00.0 and then at the July low of 117.18.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are sharply up in early U.S. trading, on more short covering. Bears have the solid overall near-term technical advantage but the bulls have some momentum. The shorter-term moving averages for the Euro 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 for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0315 and then at 1.0400. Shorter-term support is seen at 1.0200 and then at the overnight low of 1.0165. Wyckoff’s Intra Day Market Rating: 7.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bears have the near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $103.40 and then at $105.00. Look for sell stops just below technical support at $100.00 and then at $98.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower overnight. Bears are in near-term technical control at present, but a weather market could be firing up in the Corn Belt again. Scorching temperatures and less rainfall in the Midwest U.S. forecast for at least the next week favor the grain market bulls. This comes right during the key corn pollination phase of growth. However, price action early today shows any weather market scare may be fizzling.
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